NC Bar Rules of Professional Conduct:
http://www.ncbar.com/rules/rpcsearch.asp
The
complete text of the Rules as currently amended, and all of the comments
thereto, as approved by the North Carolina Supreme Court, follow this note.
Each rule is followed by annotations of cases and ethics opinions of the State
Bar that apply or interpret the rule. In the annotations, the terms
"CPR" and "RPC" designate formal ethics opinions adopted
under the superseded 1973 Code of Professional Responsibility and 1985 Rules of
Professional Conduct respectively. These opinions still provide guidance on
issues of professional conduct except to the extent that a particular opinion
is overruled by a subsequent opinion or by a provision of the current Rules of
Professional Conduct. Ethics opinions rendered invalid by subsequent opinion or
by the current Rules are generally not annotated. (A CPR opinion may be
obtained by calling the ethics department at the State Bar.) An ethics opinion
promulgated under the current or 1997 versions of the Rules is designated as a
"Formal Ethics Opinion."
The case notes reprinted or quoted verbatim are taken from the General Statutes
of North Carolina, Annotated Rules of North Carolina, Copyright 2003, by
Matthew Bender & Company, Inc., and are reprinted with permission. All
rights reserved. Final orders in recent disciplinary cases can be found here.
The primary source material for the revisions to the Rules in 2003 was the ABA
Model Rules of Professional Conduct (the "Model Rules"). The comment
to Rule 1.19 draws heavily from the text of ABA Formal Opinion 92-364,
"Sexual Relations with Clients," adopted by the ABA Standing
Committee on Ethics and Professional Responsibility on July 6, 1992.
Appreciation is expressed to the ABA and to other state bars and regulatory
agencies for assistance and materials.
Table of
Contents
Client-Lawyer
Relationship
0.0 Preamble: A
Lawyers Responsibilities
1.0
Scope
1.1
Competence
1.2
Scope of Representation and Allocation of
Authority between Client and Lawyer
1.3
Diligence
1.4
Communication
1.5
Fees
1.6
Confidentiality of Information
1.7
Conflict of Interest: Current Clients
1.8
Conflict
of Interest; Current Clients Specific Rules
1.10 Imputation of Conflicts of Interest:
General Rule
1.11 Special Conflicts of Interest for
Former and Current Government Officers and Employees
1.12 Former Judge, Arbitrator, Mediator,
or Other Third-Party Neutral
1.14 Client with Diminished Capacity
1.15-3 Records and Accountings
1.15-4 Interest on LawyersÕ Trust Accounts-Reserved
1.16 Declining or Terminating
Representation
1.18 Duties to Prospective Client
1.19
Sexual Relations with Clients Prohibited
Counselor
2.3 Evaluation for Use by Third Persons
2.4 Lawyer Serving as Third-Party Neutral
Advocate
3.1 Meritorious Claims and Contentions
3.3 Candor Toward the Tribunal
3.4 Fairness to Opposing Party and
Counsel
3.5 Impartiality and Decorum of the
Tribunal
3.8 Special Responsibilities of a
Prosecutor
Transactions with
Persons Other Than Clients
4.1 Truthfulness in Statements to Others
4.2 Communication with Person Represented
by Counsel
4.3 Dealing with Unrepresented Persons
4.4 Respect for
Rights of Third Persons
Law Firms and
Associations
5.1 Responsibilities of Partners,
Managers, and Supervisory Lawyers
5.2 Responsibilities of a Subordinate Lawyer
5.3 Responsibilities Regarding Non-lawyer
Assistants
5.4 Professional Independence of a Lawyer
5.5 Unauthorized Practice of Law
5.6 Restrictions on Right to Practice
5.7 Responsibilities Regarding
Law-Related Services
Public Service
6.1 Voluntary Pro Bono Publico
Service
6.3 Membership in Legal Services
Organization
6.4 Law Reform Activities Affecting
Client Interests
6.5 Limited Legal Services Programs
Information About Legal
Services
7.1 Communications Concerning a LawyerÕs
Services
7.3 Direct Contact with Potential Clients
7.4 Communication of Fields of Practice
and Specialization
7.5 Firm Names and Letterheads
Maintaining the
Integrity of the Profession
8.1 Bar Admission and Disciplinary
Matters
8.2 Judicial and Legal Officials
8.3 Reporting Professional Misconduct
8.5 Disciplinary Authority; Choice of Law
0.1 Preamble: A Lawyer's
Responsibilities
[1]
A lawyer, as a member of the legal profession, is a representative of clients,
an officer of the legal system, and a public citizen having special
responsibility for the quality of justice.
[2] As a representative of clients, a lawyer performs various functions. As
advisor, a lawyer provides a client with an informed understanding of the
client's legal rights and obligations and explains their practical
implications. As advocate, a lawyer zealously asserts the client's position
under the rules of the adversary system. As negotiator, a lawyer seeks a result
advantageous to the client but consistent with requirements of honest dealing
with others. As evaluator, a lawyer acts by examining a client's legal affairs
and reporting about them to the client or to others.
[3] In addition to these representational functions, a lawyer may serve as a
third-party neutral, a nonrepresentational role helping the parties to resolve
a dispute or other matter. Some of these Rules apply directly to lawyers who
are or have served as third-party neutrals. See, e.g. , Rules 1.12 and 2.4. In
addition, there are Rules that apply to lawyers who are not active in the
practice of law or to practicing lawyers even when they are acting in a
nonprofessional capacity. For example, a lawyer who commits fraud in the
conduct of a business is subject to discipline for engaging in conduct
involving dishonesty, fraud, deceit or misrepresentation. See
Rule 8.4.
[4] In all professional functions a lawyer should be competent, prompt, and
diligent. A lawyer should maintain communication with a client concerning the
representation. A lawyer should keep in confidence information relating to
representation of a client except so far as disclosure is required or permitted
by the Rules of Professional Conduct or other law.
[5] A lawyer's conduct should conform to the requirements of the law, both in
professional service to clients and in the lawyer's business and personal
affairs. A lawyer should use the law's procedures only for legitimate purposes
and not to harass or intimidate others. A lawyer should demonstrate respect for
the legal system and for those who serve it, including judges, other lawyers,
and public officials. While it is a lawyer's duty, when necessary, to challenge
the rectitude of official action, it is also a lawyer's duty to uphold the
legal process.
[6] As a public citizen, a lawyer should seek improvement of the law, access to
the legal system, the administration of justice, and the quality of service
rendered by the legal profession. As a member of a learned profession, a lawyer
should cultivate knowledge of the law beyond its use for clientÕs, employ that
knowledge in reform of the law, and work to strengthen legal education. In
addition, a lawyer should further the public's understanding of and confidence
in the rule of law and the justice system because legal institutions in a
constitutional democracy depend on popular participation and support to
maintain their authority. A lawyer should be mindful of deficiencies in the
administration of justice and of the fact that the poor, and sometimes persons
who are not poor, cannot afford adequate legal assistance. Therefore, all
lawyers should devote professional time and resources and use civic influence
to ensure equal access to our system of justice for all those who, because of
economic or social barriers, cannot afford or secure adequate legal counsel. A
lawyer should aid the legal profession in pursuing these objectives and should
help the bar regulate itself in the public interest.
[7] A lawyer should render public interest legal service and provide civic
leadership. A lawyer may discharge this responsibility by providing
professional services at no fee or a reduced fee to persons of limited means or
to public service or charitable groups or organizations, by service in
activities for improving the law, society, the legal system or the legal
profession, and by financial support for organizations that provide legal
services to persons of limited means.
[8] The legal profession is a group of people united in a learned calling for
the public good. At their best, lawyers assure the availability of legal
services to all, regardless of ability to pay, and as leaders of their
communities, states, and nation, lawyers use their education and experience to
improve society. It is the basic responsibility of each lawyer to provide
community service, community leadership, and public interest legal services
without fee, or at a substantially reduced fee, in such areas as poverty law,
civil rights, public rights law, charitable organization representation, and
the administration of justice.
[9] The basic responsibility for providing legal services for those unable to
pay ultimately rests upon the individual lawyer. Personal involvement in the
problems of the disadvantaged can be one of the most rewarding experiences in
the life of a lawyer. Every lawyer, regardless of professional prominence or
professional workload, should find time to participate in, or otherwise
support, the provision of legal services to the disadvantaged. The provision of
free legal services to those unable to pay reasonable fees continues to be an
obligation of each lawyer as well as the profession generally, but the efforts
of individual lawyers are often not enough to meet the need. Thus, the
profession and government instituted additional programs to provide legal
services. Accordingly, legal aid offices, lawyer referral services, and other
related programs were developed, and programs will be
developed by the profession and the government. Every lawyer should
support all proper efforts to meet this need for legal services.
[10] Many of a lawyer's professional responsibilities are prescribed in the
Rules of Professional Conduct, as well as substantive and procedural law.
However, a lawyer is also guided by personal conscience and the approbation of
professional peers. A lawyer should strive to attain the highest level of
skill, to improve the law and the legal profession, and to exemplify the legal
profession's ideals of public service.
[11] A lawyer's responsibilities as a representative of clients, an officer of
the legal system, and a public citizen are usually harmonious. Thus, when an
opposing party is well represented, a lawyer can be a zealous advocate on
behalf of a client and, at the same time, assume that justice is being done. So
also, a lawyer can be sure that preserving client confidences ordinarily serves
the public interest because people are more likely to seek legal advice, and
thereby heed their legal obligations, when they know their communications will
be private.
[12] In the nature of law practice, however, conflicting responsibilities are
encountered. Virtually all difficult ethical problems
arise from conflict between a lawyer's responsibilities to clients, to the
legal system, and to the lawyer's own interest in remaining an ethical person
while earning a satisfactory living. The Rules of Professional Conduct often
prescribe terms for resolving such conflicts. Within the framework of these
Rules, however, many difficult issues of professional discretion can arise.
Such issues must be resolved through the exercise of sensitive professional and
moral judgment guided by the basic principles underlying the Rules. These
principles include the lawyer's obligation zealously to protect and pursue a
client's legitimate interests, within the bounds of the law, while maintaining
a professional, courteous and civil attitude toward all persons involved in the
legal system.
[13]
Although a matter is hotly contested by the parties, a
lawyer should treat opposing counsel with courtesy and respect. The legal
dispute of the client must never become the lawyerÕs personal dispute with
opposing counsel. A lawyer, moreover, should provide zealous but honorable
representation without resorting to unfair or offensive tactics. The legal
system provides a civilized mechanism for resolving disputes, but only if the
lawyers themselves behave with dignity. A lawyerÕs word to another lawyer
should be the lawyerÕs bond. As professional colleagues, lawyers should
encourage and counsel new lawyers by providing advice and mentoring; foster
civility among members of the bar by acceding to reasonable requests that do
not prejudice the interests of the client; and counsel and assist peers who
fail to fulfill their professional duties because of substance abuse,
depression, or other personal difficulties
[14]
The legal profession is largely self-governing. Although other professions also
have been granted powers of self-government, the legal profession is unique in
this respect because of the close relationship between the profession and the
processes of government and law enforcement. This connection is manifested in
the fact that ultimate authority over the legal profession is vested largely in
the courts.
[15] To the extent that lawyers meet the obligations of their professional
calling, the occasion for government regulation is obviated. Self-regulation
also helps maintain the legal profession's independence from government
domination. An independent legal profession is an important force in preserving
government under law, for the abuse of legal authority is more readily
challenged by a self-regulated profession.
[16] The legal profession's relative autonomy carries with it a responsibility
to assure that its regulations are conceived in the public interest and not in
furtherance of parochial or self-interested concerns of the bar. Every lawyer
is responsible for observance of the Rules of Professional Conduct. A lawyer
should also aid in securing their observance by other lawyers. Neglect of these
responsibilities compromises the independence of the profession and the public interest which it serves.
[17] Lawyers play a vital role in the preservation of society. The fulfillment
of this role requires an understanding by lawyers of their relationship to our
legal system. The Rules of Professional Conduct, when properly applied, serve
to define that relationship.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997
Amended
March 1, 2003; November 16, 2006
ETHICS OPINION NOTES
2008
Formal Ethics Opinion 2. Opinion holds that a lawyer
is not prohibited from advising a school board sitting in an adjudicative
capacity in a disciplinary or employment proceeding while another lawyer from
the same firm represents the administration; however, such dual representation
is harmful to the public's perception of the fairness of the proceeding and
should be avoided.
2008
Formal Ethics Opinion 3. Opinion rules a lawyer may
assist a pro se litigant by drafting pleadings and giving advice without making
an appearance in the proceeding and without disclosing or ensuring the
disclosure of his assistance to the court unless required to do so by law or
court order.
CASE NOTES
Respect for Other Lawyers. - Where a law firm represented a client for a
number of years pursuant to a contingency fee arrangement, the firm should have
been notified of its discharge when it became clear that a new attorney was
taking over representation of the client. Robinson, Bradshaw &
Hinson v. Smith ,
129 N.C. App. 305, 498 S.E.2d 841 (1998), review dismissed, 348 N.C. 695, 511
S.E.2d 650 (1998).
Cited in SuperGuide Corp. v. DirecTV
Enters., Inc. , 141 F. Supp. 2d 616 (W.D.N.C.
2001).
0.2 Scope
[1]
The Rules of Professional Conduct are rules of reason. They should be
interpreted with reference to the purposes of legal representation and of the
law itself. Some of the rules are imperatives; cast in the terms
"shall" or "shall not." These define proper conduct for
purposes of professional discipline. Others, generally cast in the term
"may," are permissive and define areas under the Rules in which the
lawyer has discretion to exercise professional judgment. No disciplinary action
should be taken when the lawyer chooses not to act, or acts within the bounds
of such discretion. Other Rules define the nature of relationships between the
lawyer and others. The Rules are thus partly obligatory and disciplinary, and
partly constitutive and descriptive in that they define a lawyer's professional
role. Many of the Comments use the term "should." Comments do not add
obligations to the Rules but provide guidance for practicing in compliance with
the Rules.
[2] The Rules presuppose a larger legal context shaping the lawyer's role. That
context includes court rules and statutes relating to matters of licensure,
laws defining specific obligations of lawyers, and substantive and procedural
law in general. The Comments are sometimes used to alert lawyers to their
responsibilities under such other law.
[3] Compliance with the Rules, as with all law in an open society, depends
primarily upon understanding and voluntary compliance, secondarily upon
reinforcement by peer and public opinion, and finally, when necessary, upon
enforcement through disciplinary proceedings. The Rules do not, however,
exhaust the moral and ethical considerations that should inform a lawyer, for
no worthwhile human activity can be completely defined by legal rules. The
Rules simply provide a framework for the ethical practice of law.
[4] Furthermore, for purposes of determining the lawyer's authority and
responsibility, principles of substantive law external to these Rules determine
whether a client-lawyer relationship exists. Most of the duties flowing from
the client-lawyer relationship attach only after the client has requested the
lawyer to render legal services and the lawyer has agreed to do so. But there
are some duties, such as that of confidentiality under Rule 1.6,
that attach when the lawyer agrees to consider whether a client-lawyer
relationship shall be established. Rule 1.18. Whether a client-lawyer
relationship exists for any specific purpose can depend on the circumstances
and may be a question of fact.
[5] Under various legal provisions, including constitutional, statutory, and
common law, the responsibilities of government lawyers may include authority
concerning legal matters that ordinarily reposes in the client in private
client-lawyer relationships. For example, a lawyer for a government agency may
have authority on behalf of the government to decide upon settlement or whether
to appeal from an adverse judgment. Such authority in various respects is generally
vested in the attorney general and the state's attorney in state government and
their federal counterparts, and the same may be true of other government law
officers. Also, lawyers under the supervision of these officers may be
authorized to represent several government agencies in intragovernmental
legal controversies in circumstances where a private lawyer could not represent
multiple private clients. These rules do not abrogate any such authority.
[6] Failure to comply with an obligation or prohibition imposed by a Rule is a
basis for invoking the disciplinary process. The Rules presuppose that
disciplinary assessment of a lawyer's conduct will be made on the basis of the
facts and circumstances as they existed at the time of the conduct in question
and in recognition of the fact that a lawyer often has to act upon uncertain or
incomplete evidence of the situation. Moreover, the Rules presuppose that
whether or not discipline should be imposed for a violation, and the severity
of a sanction, depend on all the circumstances, such as the willfulness and
seriousness of the violation, extenuating factors, and whether there have been
previous violations.
[7] Violation of a Rule should not give rise itself to a cause of action
against a lawyer nor should it create any presumption in such a case that a
legal duty has been breached. In addition, violation of a Rule does not
necessarily warrant any other nondisciplinary remedy,
such as disqualification of a lawyer in pending litigation. The rules are
designed to provide guidance to lawyers and to provide a structure for
regulating conduct through disciplinary agencies. They are not designed to be a
basis for civil liability. Furthermore, the purpose of the Rules can be
subverted when they are invoked by opposing parties as procedural weapons. The
fact that a Rule is a just basis for a lawyer's self-assessment, or for
sanctioning a lawyer under the administration of a disciplinary authority, does
not imply that an antagonist in a collateral proceeding or transaction has
standing to seek enforcement of the Rule. Accordingly, nothing in the Rules
should be deemed to augment any substantive legal duty of lawyers or the
extra-disciplinary consequences of violating such a Rule.
[8] The Comment accompanying each Rule explains and illustrates the meaning and
purpose of the Rule. The Preamble and this note on Scope provide general
orientation. The Comments are intended as guides to interpretation, but the
text of each Rule is authoritative. Research notes were prepared to compare
counterparts in the original Rules of Professional Conduct (adopted 1985, as
amended) and to provide selected references to other authorities. The notes
have not been adopted, do not constitute part of the Rules, and are not
intended to affect the application or interpretation of the Rules and Comments.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003, February 5, 2004
ETHICS
OPINION NOTES
2006
Formal Ethics Opinion 14. Opinion rules that when a
lawyer charges a fee for a consultation, and the lawyer accepts payment, there
is a client-lawyer relationship for the purposes of the Rules of Professional
Conduct.
2010
Formal Ethics Opinion 1. A lawyer may not appear in
court for a party who has not authorized the representation and with whom the
lawyer has not established a client-lawyer relationship unless allowed by
statute, court order, or subsequent case law.
CASE NOTES
Violation Not Civil Liability Per Se . - Although a violation of a
Rule of Professional Conduct does not constitute civil liability per se , the
rules are some evidence of an attorney's duty to his client.Booher
v. Frue,
98 N.C. App. 570, 394 S.E.2d 816, cert. denied , 327 N.C. 426,
395 S.E.2d 674 (1990).
Creation of Attorney-Client Relationship. - An express
verbal agreement is not necessary to establish an attorney-client relationship,
but such may be implied from the conduct of the parties, even in the absence of
the payment of fees or the lack of a formal contract. Broyhill
v. Aycock & Spence , 102 N.C. App. 382, 402
S.E.2d 167,
aff'd. , 330 N.C. 438, 410
S.E.2d 392 (1991).
Question of Attorney-Client Relationship. - A genuine
issue of material fact was presented as to whether there was an attorney-client
relationship where defendant introduced a deposition in which he denied that he
had ever represented plaintiff in any transaction and stated that, at one
point, plaintiff claimed to defendant that he represented himself, and where
plaintiff, on the other hand, presented his affidavit stating that defendant
did represent plaintiff in the transaction at issue. Broyhill
v. Aycock & Spence , 102 N.C. App. 382, 402
S.E.2d 167, aff'd. , 330 N.C. 438, 410 S.E.2d 392 (1991).
An attorney may be held liable for negligence by a non-client third party in
the absence of privity of contract. Broyhill v. Aycock
& Spence ,
102 N.C. App. 382, 402 S.E.2d 167, aff'd. , 330 N.C. 438, 410 S.E.2d 392 (1991).
Insurance attorney had no authority to move against default judgment where
there was no contact with the individual defendant-insured. Johnson v.
Amethyst Corp. ,
120 N.C. App. 529, 463 S.E. 2d 397 (1995).
Quoted in Brooks v. Wal-Mart Stores, Inc. , 139 N.C. App. 637, 535
S.E.2d 55 (2000).
Client-Lawyer Relationship
(a)
"Belief" or "believes" denotes that the person involved
actually supposed the fact in question to be true. A person's belief may be
inferred from circumstances.
(b) "Confidential information" denotes information described in Rule
1.6.
(c) "Confirmed in writing," when used in reference to the informed
consent of a person, denotes informed consent that is given in writing by the
person or a writing that a lawyer promptly transmits to the person confirming
an oral informed consent. See paragraph (f) for the definition of
"informed consent." If it is not feasible to obtain or transmit the writing
at the time the person gives informed consent, then the lawyer must obtain or
transmit it within a reasonable time thereafter.
(d) "Firm" or "law firm" denotes a lawyer or lawyers in a
law partnership, professional corporation, sole proprietorship or other
association authorized to practice law; or lawyers employed in a legal services
organization or the legal department of a corporation, government entity, or
other organization.
(e) "Fraud" or "fraudulent" denotes conduct that is
fraudulent under the substantive or procedural law of North Carolina and has a
purpose to deceive.
(f) "Informed consent" denotes the agreement by a person to a
proposed course of conduct after the lawyer has communicated adequate
information and explanation appropriate to the circumstances.
(g) "Knowingly," "known," or "knows" denotes
actual knowledge of the fact in question. A person's knowledge may be inferred
from circumstances.
(h) "Partner" denotes a member of a partnership, a shareholder in a
law firm organized as a professional corporation, or a member of an association
authorized to practice law.
(i) "Reasonable" or "reasonably"
when used in relation to conduct by a lawyer denotes the conduct of a
reasonably prudent and competent lawyer.
(j) "Reasonable belief" or "reasonably believes" when used
in reference to a lawyer denotes that the lawyer believes the matter in
question and that the circumstances are such that the belief is reasonable.
(k) "Reasonably should know" when used in reference to a lawyer
denotes that a lawyer of reasonable prudence and competence would ascertain the
matter in question.
(l) "Screened" denotes the isolation of a lawyer from any
participation in a professional matter through the timely imposition of
procedures within a firm that are reasonably adequate under the circumstances
to protect information that the isolated lawyer is obligated to protect under
these Rules or other law.
(m) "Substantial" when used in reference to degree or extent denotes
a material matter of clear and weighty importance.
(n) "Tribunal" denotes a court, an arbitrator in a binding
arbitration proceeding or a legislative body, administrative agency or other
body acting in an adjudicative capacity. A legislative body, administrative
agency or other body acts in an adjudicative capacity when a neutral official,
after the presentation of evidence or legal argument by a party or parties, may
render a binding legal judgment directly affecting a party's interests in a
particular matter.
(o) "Writing" or "written" denotes a tangible or electronic
record of a communication or representation, including handwriting,
typewriting, printing, photostating, photography,
audio or video recording and e-mail. A "signed" writing includes an
electronic sound, symbol or process attached to or logically associated with a
writing and executed or adopted by a person with the intent to sign the
writing.
Comment
Confirmed in Writing
[1] If it is not feasible to obtain or transmit a
written confirmation at the time the client gives informed consent, then the
lawyer must obtain or transmit it within a reasonable time thereafter. If a
lawyer has obtained a client's informed consent, the lawyer may act in reliance
on that consent so long as it is confirmed in writing within a reasonable time
thereafter.
Firm
[2] Whether two or more lawyers constitute a firm
within paragraph (d) can depend on the specific facts. For example, two
practitioners who share office space and occasionally consult or assist each
other ordinarily would not be regarded as constituting a firm. However, if they
present themselves to the public in a way that suggests that they are a firm or
conduct themselves as a firm, they should be regarded as a firm for purposes of
the Rules. The terms of any formal agreement between associated lawyers are
relevant in determining whether they are a firm, as is the fact that they have
mutual access to information concerning the clients they serve. Furthermore, it
is relevant in doubtful cases to consider the underlying purpose of the Rule
that is involved. A group of lawyers could be regarded as a firm for purposes
of the Rule that the same lawyer should not represent opposing parties in
litigation, while it might not be so regarded for purposes of the Rule that
information acquired by one lawyer is attributed to another.
[3] With respect to the law department of an organization, including the
government, there is ordinarily no question that the members of the department
constitute a firm within the meaning of the Rules of Professional Conduct.
There can be uncertainty, however, as to the identity of the client. For
example, it may not be clear whether the law department of a corporation
represents a subsidiary or an affiliated corporation, as well as the
corporation by which the members of the department are directly employed. A
similar question can arise concerning an unincorporated association and its
local affiliates.
[4] Similar questions can also arise with respect to lawyers in legal aid and
legal services organizations. Depending upon the structure of the organization,
the entire organization or different components of it may constitute a firm or
firms for purposes of these Rules.
Fraud
[5] When used in these Rules, the terms "fraud" or
"fraudulent" refer to conduct that is characterized as such under the
substantive or procedural law of North Carolina and has a purpose to deceive.
This does not include merely negligent misrepresentation or negligent failure
to apprise another of relevant information. For purposes of these Rules, it is
not necessary that anyone has suffered damages or relied on the
misrepresentation or failure to inform.
Informed Consent
[6] Many of the Rules of Professional Conduct require the lawyer to obtain
the informed consent of a client or other person (e.g., a former client or,
under certain circumstances, a prospective client) before accepting or
continuing representation or pursuing a course of conduct. See, e.g. , Rules
1.6(a) and 1.7(b). The communication necessary to obtain such consent will vary
according to the Rule involved and the circumstances giving rise to the need to
obtain informed consent. The lawyer must make reasonable efforts to ensure that
the client or other person possesses information reasonably adequate to make an
informed decision. Ordinarily, this will require communication that includes a
disclosure of the facts and circumstances giving rise to the situation, any
explanation reasonably necessary to inform the client or other person of the
material advantages and disadvantages of the proposed course of conduct and a
discussion of the client's or other person's options and alternatives. In some
circumstances it may be appropriate for a lawyer to advise a client or other
person to seek the advice of other counsel. A lawyer need not inform a client
or other person of facts or implications already known to the client or other
person; nevertheless, a lawyer who does not personally inform the client or
other person assumes the risk that the client or other person is inadequately
informed and the consent is invalid. In determining whether the information and
explanation provided are reasonably adequate, relevant factors include whether
the client or other person is experienced in legal matters generally and in
making decisions of the type involved, and whether the client or other person
is independently represented by other counsel in giving the consent. Normally,
such persons need less information and explanation than others, and generally a
client or other person who is independently represented by other counsel in
giving the consent should be assumed to have given informed consent.
[7] Obtaining informed consent will usually require an affirmative response by
the client or other person. In general, a lawyer may not assume consent from a client's
or other person's silence. Consent may be inferred, however, from the conduct
of a client or other person who has reasonably adequate information about the
matter. A number of Rules require that a person's consent be confirmed in
writing. See
Rules 1.7(b) and 1.9(a). For a definition of "writing" and
"confirmed in writing," see paragraphs (o) and (c). Other Rules
require that a client's consent be obtained in a writing signed by the
client. See, e.g. ,
Rules 1.8(a) and (g). For a definition of "signed," see paragraph
(o).
Screened
[8] This definition applies to situations where screening of a personally
disqualified lawyer is permitted to remove imputation of a conflict of interest
under Rules 1.10, 1.11, 1.12 or 1.18.
[9] The purpose of screening is to assure the affected parties that
confidential information known by the personally disqualified lawyer remains
protected. The personally disqualified lawyer should acknowledge the obligation
not to communicate with any of the other lawyers in the firm with respect to
the matter. Similarly, other lawyers in the firm who are working on the matter
should be informed that the screening is in place and that they may not
communicate with the personally disqualified lawyer with respect to the matter.
Additional screening measures that are appropriate for the particular matter
will depend on the circumstances. To implement, reinforce and remind all
affected lawyers of the presence of the screening, it may be appropriate for
the firm to undertake such procedures as a written undertaking by the screened
lawyer to avoid any communication with other firm personnel and any contact
with any firm files or other materials relating to the matter, written notice
and instructions to all other firm personnel forbidding any communication with
the screened lawyer relating to the matter, denial of access by the screened
lawyer to firm files or other materials relating to the matter and periodic
reminders of the screen to the screened lawyer and all other firm personnel.
[10] In order to be effective, screening measures must be implemented as soon
as practical after a lawyer or law firm knows or reasonably should know that
there is a need for screening.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS
OPINION NOTES
2008 Formal Ethics Opinion
2. A
lawyer is not prohibited from advising a school board sitting in an
adjudicative capacity in a disciplinary or employment proceeding while another
lawyer from the same firm represents the administration; however, such dual
representation is harmful to the public's perception of the fairness of the
proceeding and should be avoided. (Discusses Òscreened.Ó)
2009
Formal Ethics Opinion 11. In order to obtain informed
consent to a conflict, a lawyer must provide enough information for his client
to make an informed decision, such as why the interests are adverse, how the
representation may be affected, what risks are involved, and what other options
are available.
2010
Formal Ethics Opinion 12. If a screen is implemented prior
to any participation by a new associate in a matter the associate worked on at
another firm, and prior to the communication of any confidential information,
the purpose for the screening procedure will have been effectuated.
Client-Lawyer Relationship
Rule 1.1 Competence
A lawyer shall not handle a
legal matter that the lawyer knows or should know he or she is not competent to
handle without associating with a lawyer who is competent to handle the matter.
Competent representation requires the legal knowledge, skill, thoroughness, and
preparation reasonably necessary for the representation.
Comment
Legal Knowledge and Skill
[1] In determining whether a lawyer employs the requisite knowledge and skill
in a particular matter, relevant factors include the relative complexity and
specialized nature of the matter, the lawyer's general experience, the lawyer's
training and experience in the field in question, the preparation and study the
lawyer is able to give the matter, and whether it is feasible to refer the
matter to, or associate or consult with, a lawyer of established competence in
the field in question. In many instances, the required proficiency is that of a
general practitioner. Expertise in a particular field of law may be required in
some circumstances.
[2] A lawyer need not necessarily have special training or prior experience to
handle legal problems of a type with which the lawyer is unfamiliar. A newly
admitted lawyer can be as competent as a practitioner with long experience.
Some important legal skills, such as the analysis of precedent, the evaluation
of evidence, and legal drafting, are required in all legal problems. Perhaps
the most fundamental legal skill consists of determining what kind of legal problems
a situation may involve, a skill that necessarily transcends any particular
specialized knowledge. A lawyer can provide adequate representation in a wholly
novel field through necessary study. Competent representation can also be
provided through the association of a lawyer of established competence in the
field in question.
[3] In an emergency, a lawyer may give advice or assistance in a matter in
which the lawyer does not have the skill ordinarily required where referral to,
or consultation or association with, another lawyer would be impractical. Even
in an emergency, however, assistance should be limited to that which is
reasonably necessary under the circumstances, for ill-considered action under
emergency conditions can jeopardize the client's interest.
[4] A lawyer may accept representation where the requisite level of competence
can be achieved by reasonable preparation. This applies as well to a lawyer who
is appointed as counsel for an unrepresented person.
Thoroughness and Preparation
[5] Competent handling of a particular matter includes inquiry into, and
analysis of, the factual and legal elements of the problem, and use of methods
and procedures meeting the standards of competent practitioners. It also
includes adequate preparation. The required attention and preparation are
determined, in part, by what is at stake; major litigation and complex
transactions ordinarily require more extensive treatment than matters of lesser
complexity or consequence. An agreement between the lawyer and the client
regarding the scope of the representation may limit the matters for which the
lawyer is responsible. See
Rule 1.2(c).
Maintaining Competence
[6] To maintain the requisite knowledge and skill, a lawyer should keep abreast
of changes in the law and its practice, engage in continuing study and
education, and comply with all continuing legal education requirements to which
the lawyer is subject.
Distinguishing Professional Negligence
[7] An error by a lawyer may constitute professional malpractice under the
applicable standard of care and subject the lawyer to civil liability. However,
conduct that constitutes a breach of the civil standard of care owed to a
client giving rise to liability for professional malpractice does not
necessarily constitute a violation of the ethical duty to represent a client
competently. A lawyer who makes a good-faith effort to be prepared and to be
thorough will not generally be subject to professional discipline, although he
or she may be subject to a claim for malpractice. For example, a single error
or omission made in good faith, absent aggravating circumstances, such as an
error while performing a public records search, is not usually indicative of a
violation of the duty to represent a client competently.
[8] Repeated failure to perform legal services competently is a violation of
this rule. A pattern of incompetent behavior demonstrates that a lawyer cannot
or will not acquire the knowledge and skills necessary for minimally competent
practice. For example, a lawyer who repeatedly provides legal services that are
inadequate or who repeatedly provides legal services that are unnecessary is
not fulfilling his or her duty to be competent. This pattern of behavior does
not have to be the result of a dishonest or sinister motive, nor does it have
to result in damages to a client giving rise to a civil claim for malpractice
in order to cast doubt on the lawyer's ability to fulfill his or her
professional responsibilities.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
RPC 198.
Opinion explores the ethical responsibilities of stand-by defense counsel who
are instructed to take over the defense in a capital murder case without an
opportunity to prepare.
RPC 199. Opinion addresses the
ethical responsibilities of a lawyer appointed to represent a criminal defendant
in a capital case who, in good faith, believes he lacks the experience and
ability to represent the defendant competently.
RPC 216. A lawyer may use the
services of a nonlawyer independent contractor to
search a title provided the nonlawyer is properly supervised by the lawyer.
99
Formal Ethics Opinion 12. Opinion rules that when a
lawyer appears with a debtor at a meeting of creditors in a bankruptcy
proceeding as a favor to the debtor's lawyer, the lawyer is representing the
debtor and all of the ethical obligations attendant to legal
representation apply.
2002
Formal Ethics Opinion 5. Opinion rules that whether
electronic mail should be retained as a part of a client's file is a legal
decision to be made by the lawyer.
2007
Formal Ethics Opinion 12. A lawyer may outsource
limited legal support services to foreign assistants
provided the lawyer properly selects and supervises the foreign assistants,
ensures the preservation of client confidences, avoids conflicts of interests,
discloses the outsourcing, and obtains the client's advanced informed consent.
2008
Formal Ethics Opinion 14. It is not an ethical
violation when a lawyer fails to attribute or obtain consent when incorporating
into his own brief, contract, or pleading excerpts from a legal brief,
contract, or pleading written by another lawyer and placed into the public
domain.
2009
Formal Ethics Opinion 17. Whether a lawyer rendering a
title opinion to a title insurer should tack to an ownerÕs policy of title
insurance or a mortgageeÕs policy is a question of standard of care and outside
the purview of the Ethics Committee.
2011
Formal Ethics Opinion 10. A lawyer may advertise on a
website that offers daily discounts to consumers where the website companyÕs
compensation is a percentage of the amount paid to the lawyer if certain
disclosures are made and certain conditions are satisfied.
CASE NOTES
Cited in State v. Rogers,
352 N.C. 119, 529 S.E.2d 671 (2000).
Client-Lawyer Relationship
Rule 1.2 Scope Of Representation and Allocation
of Authority between Client and Lawyer
(a) Subject to paragraphs (c)
and (d), a lawyer shall abide by a client's decisions concerning the objectives
of representation and, as required by Rule 1.4, shall consult with the client
as to the means by which they are to be pursued. A lawyer may take such action
on behalf of the client as is impliedly authorized to carry out the
representation.
(1) A lawyer shall abide by a
client's decision whether to settle a matter. In a criminal case, the lawyer
shall abide by the client's decision, after consultation with the lawyer, as to
a plea to be entered, whether to waive jury trial and whether the client will
testify.
(2) A lawyer does not violate this rule by acceding to reasonable requests of
opposing counsel that do not prejudice the rights of a client, by being
punctual in fulfilling all professional commitments, by avoiding offensive
tactics, or by treating with courtesy and consideration all persons involved in
the legal process.
(3) In the representation of a client, a lawyer may exercise his or her
professional judgment to waive or fail to assert a right or position of the
client.
(b) A lawyer's representation of a client, including
representation by appointment, does not constitute an endorsement of the
client's political, economic, social or moral views or activities.
(c) A lawyer may limit the scope of the representation if the limitation is
reasonable under the circumstances.
(d) A lawyer shall not counsel a client to engage, or assist a client, in
conduct that the lawyer knows is criminal or fraudulent, but a lawyer may
discuss the legal consequences of any proposed course of conduct with a client
and may counsel or assist a client to make a good faith effort to determine the
validity, scope, meaning or application of the law.
Comment
Allocation of Authority between Client and Lawyer
[1] Paragraph (a) confers upon the client the ultimate authority to
determine the purposes to be served by legal representation, within the limits
imposed by law and the lawyer's professional obligations. The decisions
specified in paragraph (a), such as whether to settle a civil matter, must also
be made by the client. See Rule 1.4(a)(1) for the lawyer's duty to communicate
with the client about such decisions. With respect to the means by which the
client's objectives are to be pursued, the lawyer shall consult with the client
as required by Rule 1.4(a)(2) and may take such action as is impliedly
authorized to carry out the representation. Lawyers are encouraged to treat
opposing counsel with courtesy and to cooperate with opposing counsel when it
will not prevent or unduly hinder the pursuit of the objective of the
representation. To this end, a lawyer may waive a right or fail to assert a
position of a client without first obtaining the client's consent. For example,
a lawyer may consent to an extension of time for the opposing party to file
pleadings or discovery without obtaining the client's consent.
[2] On occasion, however, a lawyer and a client may disagree about the means to
be used to accomplish the client's objectives. Clients normally defer to the
special knowledge and skill of their lawyer with respect to the means to be
used to accomplish their objectives, particularly with respect to technical,
legal and tactical matters. Conversely, lawyers usually defer to the client
regarding such questions as the expense to be incurred and concern for third
persons who might be adversely affected. Because of the varied nature of the matters
about which a lawyer and client might disagree and because the actions in
question may implicate the interests of a tribunal or other persons, this Rule
does not prescribe how such disagreements are to be resolved. Other law,
however, may be applicable and should be consulted by the lawyer. The lawyer
should also consult with the client and seek a mutually acceptable resolution
of the disagreement. If such efforts are unavailing and the lawyer has a
fundamental disagreement with the client, the lawyer may withdraw from the
representation. See Rule 1.16(b)(4). Conversely, the client
may resolve the disagreement by discharging the lawyer. See Rule
1.16(a)(3).
[3] At the outset of a representation, the client may authorize the lawyer to
take specific action on the client's behalf without further consultation.
Absent a material change in circumstances and subject to Rule 1.4, a lawyer may
rely on such an advance authorization. The client may, however, revoke such
authority at any time.
[4] In a case in which the client appears to be suffering diminished capacity,
the lawyer's duty to abide by the client's decisions is to be guided by
reference to Rule 1.14.
Independence from Client's Views or Activities
[5] Legal representation should not be denied to people who are unable to
afford legal services, or whose cause is controversial or the subject of
popular disapproval. By the same token, representing a client does not
constitute approval of the client's views or activities.
Agreements Limiting Scope of Representation
[6] The scope of services to be provided by a lawyer may be limited by
agreement with the client or by the terms under which the lawyer's services are
made available to the client. When a lawyer has been retained
by an insurer to represent an insured, for example, the representation
may be limited to matters related to the insurance coverage. A limited
representation may be appropriate because the client has limited objectives for
the representation. In addition, the terms upon which representation is
undertaken may exclude specific means that might otherwise be used to
accomplish the client's objectives. Such limitations may exclude actions that
the client thinks are too costly or that the lawyer regards as repugnant or
imprudent.
[7] Although this Rule affords the lawyer and client substantial latitude to
limit the representation, the limitation must be reasonable under the
circumstances. If, for example, a client's objective is limited to securing
general information about the law the client needs in order to handle a common
and typically uncomplicated legal problem, the lawyer and client may agree that
the lawyer's services will be limited to a brief telephone consultation. Such a
limitation, however, would not be reasonable if the time allotted was not
sufficient to yield advice upon which the client could rely. Although an
agreement for a limited representation does not exempt a lawyer from the duty
to provide competent representation, the limitation is a factor to be
considered when determining the legal knowledge, skill, thoroughness and
preparation reasonably necessary for the representation. See Rule 1.1.
[8] Although paragraph (c) does not require that the client's informed consent
to a limited representation be in writing, a specification of the scope of
representation will normally be a necessary part of any written communication
of the rate or basis of the lawyer's fee. See Rule 1.0(f) for the definition of
"informed consent."
[9] All agreements concerning a lawyer's representation of a client must accord
with the Rules of Professional Conduct and other law. See, e.g. , Rules
1.1, 1.8 and 5.6.
Criminal, Fraudulent and Prohibited Transactions
[10] Paragraph (d) prohibits a lawyer from knowingly counseling or
assisting a client to commit a crime or fraud. This prohibition, however, does
not preclude the lawyer from giving an honest opinion about the actual
consequences that appear likely to result from a client's conduct. Nor does the
fact that a client uses advice in a course of action that is criminal or
fraudulent of itself make a lawyer a party to the
course of action. There is a critical distinction between presenting an
analysis of legal aspects of questionable conduct and recommending the means by
which a crime or fraud might be committed with impunity. There is also a
distinction between giving a client legitimate advice about asset protection
and assisting in the illegal or fraudulent conveyance of assets.
[11] When the client's course of action has already begun and is continuing,
the lawyer's responsibility is especially delicate. The lawyer is required to
avoid assisting the client, for example, by drafting or delivering documents
that the lawyer knows are fraudulent or by suggesting how the wrongdoing might
be concealed. A lawyer may not continue assisting a client in conduct that the
lawyer originally supposed was legally proper but then discovers is criminal or
fraudulent. The lawyer must, therefore, withdraw from the representation of the
client in the matter. See Rule 1.16(a). In some cases,
withdrawal alone might be insufficient. It may be necessary for the lawyer to
give notice of the fact of withdrawal and to disaffirm any opinion, document,
affirmation or the like. In extreme cases, substantive law may require a lawyer
to disclose information relating to the representation to avoid being deemed to
have assisted the client's crime or fraud. See Rule 4.1.
[12] Where the client is a fiduciary, the lawyer may be charged with special
obligations in dealings with a beneficiary.
[13] Paragraph (d) applies whether or not the defrauded party is a party to the
transaction. Hence, a lawyer must not participate in a transaction to
effectuate criminal or fraudulent avoidance of tax liability. Paragraph (d)
does not preclude undertaking a criminal defense incident to a general retainer
for legal services to a lawful enterprise. The last clause of paragraph (d)
recognizes that determining the validity or interpretation of a statute or
regulation may require a course of action involving disobedience of the statute
or regulation or of the interpretation placed upon it by governmental
authorities.
[14] If a lawyer comes to know or reasonably should know that a client expects
assistance not permitted by the Rules of Professional Conduct or other law or
if the lawyer intends to act contrary to the client's instructions, the lawyer
must consult with the client regarding the limitations on the lawyer's
conduct. See Rule 1.4(a)(5).
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 110. An attorney may not advise client to seek a Dominican divorce
knowing that the client will return immediately to North Carolina and
continue residence.
RPC 44. A closing attorney must
follow the lender's closing instruction that closing documents be recorded
prior to disbursement.
RPC 103. A lawyer for the insured
and the insurer may not enter voluntary dismissal of the insured's counterclaim
without the insured's consent.
RPC 118. An attorney should not
waive the statute of limitations without the client's consent.
RPC 114. Attorneys may give legal
advice and drafting assistance to persons wishing to proceed
pro se without appearing as counsel of record.
RPC 129. Prosecutors and defense
attorneys may negotiate plea agreements in which appellate and post-conviction
rights are waived, except in regard to allegations of ineffective assistance of
counsel or prosecutorial misconduct.
RPC 145. A lawyer may not include
language in an employment agreement that divests the client of her exclusive
authority to settle a civil case.
RPC 172. A lawyer retained by an
insurer to defend its insured is not required to represent the insured on a
compulsory counterclaim provided the lawyer apprises the insured of the
counterclaim in sufficient time to retain separate counsel.
RPC 208. A lawyer should avoid
offensive trial tactics and treat others with courtesy by attempting to
ascertain the reason for the opposing party's failure to respond to a notice of
hearing where there has been no prior lack of diligence or responsiveness on
the part of opposing counsel.
RPC 212. A lawyer may contact an
opposing lawyer who failed to file an answer on time to remind the other lawyer
of the error and to give the other lawyer a last opportunity to file the
pleading.
RPC 220. A lawyer should seek the
court's permission to listen to a tape recording of a telephone conversation of
his or her client made by a third party if listening to the tape recording
would otherwise be a violation of the law.
RPC 223. When a lawyer's reasonable
attempts to locate a client are unsuccessful, the client's disappearance
constitutes a constructive discharge of the lawyer requiring the lawyer's
withdrawal from the representation.
RPC 240. A lawyer may decline to
represent a client on a property damage claim while agreeing to represent the
client on a personal injury claim arising out of a motor vehicle accident
provided the limited representation will not adversely affect the client's
representation on the personal injury claim and the client consents after full
disclosure.
RPC 252. A lawyer in receipt of
materials that appear on their face to be subject to the attorney-client
privilege or otherwise confidential, which were inadvertently sent to the
lawyer by the opposing party or opposing counsel, should refrain from examining
the materials and return them to the sender.
98
Formal Ethics Opinion 2. Opinion rules that a lawyer
may explain the effect of service of process to a client but may not advise a
client to evade service of process.
99
Formal Ethics Opinion 12. Opinion rules that when a
lawyer appears with a debtor at a meeting of creditors in a bankruptcy
proceeding as a favor to the debtor's lawyer, the lawyer is representing the
debtor and all of the ethical obligations attendant to legal
representation apply.
2002
Formal Ethics Opinion 1. Opinion rules that, in a
petition to a court for an award of an attorney's fee, a lawyer must disclose
that the client paid a discounted hourly rate for legal services as a result of
the client's membership in a prepaid or group legal services plan.
2003
Formal Ethics Opinion 16. Opinion rules that a lawyer
who is appointed to represent a parent in a proceeding to determine whether the
parentÕs child is abused, neglected or dependent, must seek to withdraw if the
client disappears without communicating her objectives for the representation,
and, if the motion is denied, must refrain from advocating for a particular
outcome.
2005
Formal Ethics Opinion 10. Opinion addresses
ethical concerns raised by an internet-based or virtual law practice and the
provision of unbundled legal services.
2008
Formal Ethics Opinion 3. A lawyer may assist a pro se
litigant by drafting pleadings and giving advice without making an appearance
in the proceeding and without disclosing or ensuring the disclosure of his
assistance to the court unless required to do so by law or court order.
2008
Formal Ethics Opinion 7. A closing lawyer shall not
record and disburse when a seller has delivered the deed to the lawyer but the
buyer instructs the lawyer to take no further action to close the transaction.
2010
Formal Ethics Opinion 1. A lawyer may not appear in
court for a party who has not authorized the representation and with whom the
lawyer has not established a client-lawyer relationship unless allowed by
statute, court order, or subsequent case law.
2011
Formal Ethics Opinion 3. A criminal defense lawyer
may advise an undocumented alien that deportation may result in avoidance of a
criminal conviction and may file a notice of appeal to superior court although
there is a possibility that client will be deported
1.5
2011
Formal Ethics Opinion 10. A lawyer may advertise on a
website that offers daily discounts to consumers where the website companyÕs
compensation is a percentage of the amount paid to the lawyer if certain
disclosures are made and certain conditions are satisfied.
CASE NOTES
Law Firm as Interested Party. - Law firm which had no contact with defendant/phony psychiatric
resident accused of sexual misconduct with client and which had not been authorized
by him to undertake his representation lacked the authority under subsection
(a) of this rule to represent him on a limited basis, but could intervene under
¤ 1A-1, Rule 24(a)(2) as an interested party to protect its interests. Dunkley
v. Shoemate , 350 N.C. 573, 515 S.E.2d 442 (1999).
Client-Lawyer Relationship
Rule 1.3 Diligence
A lawyer shall act with reasonable diligence and promptness in
representing a client.
Comment
[1] A lawyer should pursue a matter on behalf of a client despite opposition,
obstruction or personal inconvenience to the lawyer, and take whatever lawful
and ethical measures are required to vindicate a client's cause or endeavor. A
lawyer must also act with commitment and dedication to the interests of the
client and with zeal in advocacy upon the client's behalf. A lawyer is not
bound, however, to press for every advantage that might be realized for a
client. For example, a lawyer may have authority to exercise professional
discretion in determining the means by which a matter should be pursued. See
Rule 1.2. The lawyer's duty to act with reasonable diligence does not require
the use of offensive tactics or preclude the treating of all persons involved
in the legal process with courtesy and respect.
[2] A lawyer's workload must be controlled so that each matter can be handled
competently.
[3] Perhaps no professional shortcoming is more widely resented than
procrastination. A client's interests often can be adversely affected by the
passage of time or the change of conditions. In extreme instances, as when a
lawyer overlooks a statute of limitations, the client's legal position may be
destroyed. Even when the client's interests are not affected in substance,
however, unreasonable delay can cause a client needless anxiety and undermine
confidence in the lawyer's trustworthiness. A lawyer's duty to act with
reasonable promptness, however, does not preclude the lawyer from agreeing to a
reasonable request for a postponement that will not prejudice the lawyer's
client.
[4] Unless the relationship is terminated as provided in Rule 1.16, a lawyer
should carry through to conclusion all matters undertaken for a client. If a
lawyer's employment is limited to a specific matter, the relationship terminates
when the matter has been resolved. If a lawyer has served a client over a
substantial period in a variety of matters, the client sometimes may assume
that the lawyer will continue to serve on a continuing basis unless the lawyer
gives notice of withdrawal. Doubt about whether a client-lawyer relationship
still exists should be clarified by the lawyer, preferably in writing, so that
the client will not mistakenly suppose the lawyer is looking after the client's
affairs when the lawyer has ceased to do so. For example, if a lawyer has
handled a judicial or administrative proceeding that
produced a result adverse to the client and the lawyer and the client have not
agreed that the lawyer will handle the matter on appeal, the lawyer must
consult with the client about the possibility of appeal before relinquishing
responsibility for the matter. See
Rule 1.4(a)(2). Whether the lawyer is obligated to prosecute the appeal for the
client depends on the scope of the representation the lawyer has agreed to
provide to the client. See
Rule 1.2.
[5] To prevent neglect of client matters in the event of a sole practitioner's
death or disability, the duty of diligence may require that each sole
practitioner prepare a plan, in conformity with applicable rules, that designates
another competent lawyer to review client files, notify each client of the
lawyer's death or disability, and determine whether there is a need for
immediate protective action. Cf . 27 N.C.A.C. 1B, .0122 (providing
for court appointment of a lawyer to inventory files and take other protective
action to protect the interests of the clients of a lawyer who has disappeared
or is deceased or disabled).
Distinguishing Professional Negligence
[6] Conduct that may constitute professional malpractice does not
necessarily constitute a violation of the ethical duty to represent a client
diligently. Generally speaking, a single instance of unaggravated
negligence does not warrant discipline. For example, missing a statute of
limitations may form the basis for a claim of professional malpractice.
However, where the failure to file the complaint in a timely manner is due to
inadvertence or a simple mistake such as mislaying the papers or miscalculating
the date upon which the statute of limitations will run, absent some other
aggravating factor, such an incident will not generally constitute a violation
of this rule.
[7] Conduct sufficient to warrant the imposition of professional discipline is
typically characterized by the element of intent or scienter
manifested when a lawyer knowingly or recklessly disregards his or her
obligations. Breach of the duty of diligence sufficient to warrant professional
discipline occurs when a lawyer consistently fails to carry out the obligations
that the lawyer has assumed for his or her clients. A pattern of delay,
procrastination, carelessness, and forgetfulness regarding client matters
indicates a knowing or reckless disregard for the lawyer's professional duties.
For example, a lawyer who habitually misses filing deadlines and court dates is
not taking his or her professional responsibilities seriously. A pattern of
negligent conduct is not excused by a burdensome case load
or inadequate office procedures.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
RPC 48.
Opinion outlines professional responsibilities of lawyers involved in a law
firm dissolution.
99
Formal Ethics Opinion 5. Opinion rules that whether
the lawyer for a residential real estate closing must obtain the cancellation
of record of a prior deed of trust depends upon the agreement of the parties.
CASENOTES
Failure to Seek Appellate Review. - Appointed counsel who failed to seek
appellate review in four criminal cases held in violation of the disciplinary rule. In re Robinson , 39 N.C. App. 345, 250
S.E.2d 79 (1979).
Failure to Perfect Appeal. - The failure of the
respondent attorney to perfect an appeal in a criminal case in which the
sentence of death had been imposed was a violation of the disciplinary
rule. In re Dale,
39 N.C. App. 370, 250 S.E.2d 82, appeal dismissed , 296 N.C. 584, 254 S.E.2d 30
(1979).
Client-Lawyer Relationship
Rule 1.4 Communication
(a) A lawyer shall:
(1) promptly
inform the client of any decision or circumstance with respect to which the
client's informed consent, as defined in Rule 1.0(f), is required by these
Rules;
(2) reasonably consult with the client about the means by which the client's
objectives are to be accomplished;
(3) keep the client reasonably informed about the status of the matter;
(4) promptly comply with reasonable requests for information; and
(5) consult with the client about any relevant limitation on the lawyer's
conduct when the lawyer knows that the client expects assistance not permitted
by the Rules of Professional Conduct or other law.
(b) A lawyer shall explain a matter to the extent reasonably
necessary to permit the client to make informed decisions regarding the
representation.
Comment
[1] Reasonable communication between the lawyer and the client is necessary for
the client effectively to participate in the representation.
Communicating with Client
[2] If these Rules require that a particular decision about the representation
be made by the client, paragraph (a)(1) requires that the lawyer promptly
consult with and secure the client's consent prior to taking action unless
prior discussions with the client have resolved what action the client wants
the lawyer to take. For example, a lawyer who receives from opposing counsel an
offer of settlement in a civil controversy or a proffered plea bargain in a
criminal case must promptly inform the client of its substance unless the
client has previously indicated that the proposal will be acceptable or
unacceptable or has authorized the lawyer to accept or to reject the
offer. See Rule 1.2(a).
[3] Paragraph (a)(2) requires the lawyer to consult with the client about the
means to be used to accomplish the client's objectives. In some situations -
depending on both the importance of the action under consideration and the
feasibility of consulting with the client - this duty will require consultation
prior to taking action. In other circumstances, such as
during a trial when an immediate decision must be made, the exigency of the
situation may require the lawyer to act without prior consultation. In
such cases the lawyer must nonetheless act reasonably to inform the client of
actions the lawyer has taken on the client's behalf. Additionally, paragraph
(a)(3) requires that the lawyer keep the client reasonably informed about the
status of the matter, such as significant developments affecting the timing or
the substance of the representation.
[4] A lawyer's regular communication with clients will minimize the occasions
on which a client will need to request information concerning the
representation. When a client makes a reasonable request for information,
however, paragraph (a)(4) requires prompt compliance with the request, or if a
prompt response is not feasible, that the lawyer, or a member of the lawyer's
staff, acknowledge receipt of the request and advise the client when a response
may be expected. Client telephone calls should be promptly returned or
acknowledged.
Explaining Matters
[5] The client should have sufficient information to participate
intelligently in decisions concerning the objectives of the representation and
the means by which they are to be pursued, to the
extent the client is willing and able to do so. Adequacy of communication
depends in part on the kind of advice or assistance that is involved. For
example, when there is time to explain a proposal made in a negotiation, the
lawyer should review all important provisions with the
client before proceeding to an agreement. In litigation a lawyer should explain
the general strategy and prospects of success and ordinarily should consult the
client on tactics that are likely to result in significant expense or to injure
or coerce others. On the other hand, a lawyer ordinarily will not be expected
to describe trial or negotiation strategy in detail. The guiding principle is
that the lawyer should fulfill reasonable client expectations for information
consistent with the duty to act in the client's best interests, and the
client's overall requirements as to the character of representation. In certain
circumstances, such as when a lawyer asks a client to consent to a
representation affected by a conflict of interest, the client must give
informed consent, as defined in Rule 1.0(f).
[6] Ordinarily, the information to be provided is that appropriate for a client
who is a comprehending and responsible adult. However, fully informing the
client according to this standard may be impracticable, for example, where the
client is a child or suffers from diminished capacity. See Rule
1.14. When the client is an organization or group, it is often impossible or inappropriate
to inform every one of its members about its legal affairs; ordinarily, the
lawyer should address communications to the appropriate officials of the
organization. SeeRule 1.13. Where many
routine matters are involved, a system of limited or occasional reporting may
be arranged with the client.
Withholding Information
[7] In some circumstances, a lawyer may be justified in delaying
transmission of information when the client would be likely to react
imprudently to an immediate communication. Thus, a lawyer might withhold a
psychiatric diagnosis of a client when the examining psychiatrist indicates
that disclosure would harm the client. A lawyer may not withhold information to
serve the lawyer's own interest or convenience or the interests or convenience
of another person. Rules or court orders governing litigation may provide that
information supplied to a lawyer may not be disclosed to the client. Rule
3.4(c) directs compliance with such rules or orders.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
RPC 48.
Opinion outlines professional responsibilities of lawyers involved in a law
firm dissolution.
RPC 91. An attorney employed by the
insurer to represent the insured and its own interests may not send the insurer
a letter on behalf of the insured demanding settlement within the policy limits
but must inform insurer of insured's wishes.
RPC 92. An attorney representing
both the insurer and the insured need not surrender to the insured copies of
all correspondence concerning the case between herself
and the insurer.
RPC 99. A lawyer may tack onto an
existing title insurance policy if such is disclosed to the client prior to
undertaking the representation.
RPC 111. An attorney retained by a
liability insurer to defend its insured may not advise insured or insurer regarding the plaintiff's offer to limit the
insured's liability in exchange for consent to an amendment of the complaint to
add a punitive damages claim but must communicate the proposal to both clients.
RPC 112. An attorney retained by an
insurer to defend its insured may not advise insurer or insured regarding the
plaintiff's offer to limit the insured's liability in exchange for an admission
of liability but must communicate the proposal to both clients.
RPC 129. Prosecution and defense
attorneys may negotiate plea agreements in which appellate and post-conviction
rights are waived, except in regard to allegations of ineffective assistance of
counsel or prosecutorial misconduct. Defense attorney must explain the
consequences to the client.
RPC 156. An attorney who has been
retained by an insurance company to represent an insured must inform and advise
the insured to the degree necessary for the insured to make informed decisions
about future representation when the insurance company pays its entire coverage
and is released from further liability or obligation to participate in the
defense under the provisions of N.C.G.S. 20-279.21(b)(4).
RPC 172. A lawyer retained by an
insurer to defend its insured is not required to represent the insured on a
compulsory counterclaim provided the lawyer apprises the insured of the
counterclaim in sufficient time to retain separate counsel.
99
Formal Ethics Opinion 12. Opinion rules that when a
lawyer appears with a debtor at a meeting of creditors in a bankruptcy
proceeding as a favor to the debtor's lawyer, the lawyer is representing the
debtor and all of the ethical obligations attendant to legal
representation apply.
2006
Formal Ethics Opinion 1. A lawyer who represents the
employer and its workers' compensation carrier must share the case evaluation,
litigation plan, and other information with both clients unless the clients
give informed consent to withhold such information.
2007
Formal Ethics Opinion 12. A lawyer may outsource
limited legal support services to a foreign lawyer or a nonlawyer
(collectively "foreign assistants") provided the lawyer properly
selects and supervises the foreign assistants, ensures the preservation of
client confidences, avoids conflicts of interests, discloses the outsourcing,
and obtains the client's advanced informed consent.
CASE NOTES
Failure to Notify Client of Dates. - The attorney violated the Code of
Professional Responsibility by failing to notify the client of court
dates. North Carolina State Bar v. Frazier , 62 N.C. App. 172, 302
S.E.2d 648, appeal dismissed , 308 N.C. 677, 303 S.E.2d 546
(1983).
A lawyer is ethically bound to advise his client of a plea bargain offer. State
v. Simmons ,
65 N.C. App. 294, 309 S.E.2d 493 (1983).
Client-Lawyer Relationship
(a) A lawyer shall not make an agreement for, charge, or collect
an illegal or clearly excessive fee or charge or collect a clearly excessive
amount for expenses. The factors to be considered in determining whether a fee
is clearly excessive include the following:
(1) the
time and labor required, the novelty and difficulty of the questions involved,
and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing
the services; and
(8) whether the fee is fixed or contingent.
(b) When the lawyer has not regularly represented the client, the
scope of the representation and the basis or rate of the fee and expenses for
which the client will be responsible shall be communicated to the client,
preferably in writing, before or within a reasonable time after commencing the
representation.
(c) A fee may be contingent on the outcome of the matter
for which the service is rendered, except in a matter in which a contingent fee
is prohibited by paragraph (d) or other law. A contingent fee agreement shall
be in a writing signed by the client and shall state the method by which the
fee is to be determined, including the percentage or percentages that shall
accrue to the lawyer in the event of settlement, trial or appeal; litigation
and other expenses to be deducted from the recovery; and whether such expenses
are to be deducted before or after the contingent fee is calculated. The
agreement must clearly notify the client of any expenses for which the client
will be liable whether or not the client is the prevailing party. Upon
conclusion of a contingent fee matter, the lawyer shall provide the client with
a written statement stating the outcome of the matter and, if there is a
recovery, showing the remittance to the client and the method of its
determination.
(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) a
contingent fee for representing a defendant in a criminal case; however, a
lawyer may charge and collect a contingent fee for representation in a criminal
or civil asset forfeiture proceeding if not otherwise prohibited by law; or
(2) a contingent fee in a civil case in which such a fee is prohibited by law.
(e) A division of a fee between lawyers who are not in the same
firm may be made only if:
(1) the
division is in proportion to the services performed by each lawyer or each
lawyer assumes joint responsibility for the representation;
(2) the client agrees to the arrangement, including the share each lawyer will
receive, and the agreement is confirmed in writing; and
(3) the total fee is reasonable.
(f) Any lawyer having a dispute with a client regarding a fee for
legal services must:
(1) make
reasonable efforts to advise his or her client of the existence of the North
Carolina State Bar's program of fee dispute resolution at least 30 days prior
to initiating legal proceedings to collect the disputed fee; and
(2) participate
in good faith in the fee dispute resolution process if the client submits a
proper request.
Comment
Appropriate Fees and Expenses
[1] Paragraph (a) requires that lawyers charge fees that are not clearly
excessive under the circumstances. The factors specified in (1) through (8) are
not exclusive. Nor will each factor be relevant in each instance. Paragraph (a)
also requires that expenses for which the client will be charged must not be
clearly excessive. A lawyer may seek reimbursement for expenses for in-house
services, such as copying, or for other expenses incurred in-house, such as
telephone charges, either by charging a reasonable amount to which the client
has agreed in advance or by charging an amount that reasonably reflects the
cost incurred by the lawyer.
Basis or Rate of Fee
[2] When the lawyer has regularly represented a
client, an understanding will have ordinarily evolved concerning the basis or
rate of the fee and the expenses for which the client will be responsible. In a
new client-lawyer relationship, however, a written understanding as to fees and
expenses should be promptly established. Generally, furnishing the client with
a simple memorandum or copy of the lawyer's customary fee arrangements will
suffice, provided that the writing states the general nature of the legal
services to be provided, the basis, rate or total amount of the fee and whether
and to what extent the client will be responsible for any costs, expenses or
disbursements in the course of the representation. A written statement
concerning the terms of the engagement reduces the possibility of
misunderstanding.
[3] Contingent fees, like any other fees, are subject to the standard of
paragraph (a) of this Rule. In determining whether a particular contingent fee
is clearly excessive, or whether it is reasonable to charge any form of
contingent fee, a lawyer must consider the factors that are relevant under the
circumstances. Applicable law may impose limitations on contingent fees, such
as a ceiling on the percentage allowable, or may require a lawyer to offer
clients an alternative basis for the fee. Applicable law also may apply to
situations other than a contingent fee, for example, government regulations
regarding fees in certain tax matters.
Terms of Payment
[4] A lawyer may require advance payment of a fee, but is obliged to return
any unearned portion. See Rule 1.16(d). This does not apply
when the advance payment is a true retainer to reserve services rather than an
advance to secure the payment of fees yet to be earned. A lawyer may accept
property in payment for services, such as an ownership interest in an
enterprise, provided this does not involve acquisition of a proprietary
interest in the cause of action or subject matter of the litigation contrary to
Rule 1.8 (i). However, a fee paid in property instead
of money may be subject to the requirements of Rule 1.8(a) because such fees
often have the essential qualities of a business transaction with the client.
[5] Once a fee agreement has been reached between attorney and client, the
attorney has an ethical obligation to fulfill the contract and represent the
client's best interests regardless of whether the lawyer has struck an
unfavorable bargain. An attorney may seek to renegotiate the fee agreement in
light of changed circumstances or for other good cause, but the attorney may
not abandon or threaten to abandon the client to cut the attorney's losses or
to coerce an additional or higher fee. Any fee contract made or remade during
the existence of the attorney-client relationship must be reasonable and freely
and fairly made by the client having full knowledge of all material
circumstances incident to the agreement. If a dispute later arises concerning
the fee, the burden of proving reasonableness and fairness will be upon the
lawyer.
[6] An agreement may not be made whose terms might induce the lawyer improperly
to curtail services for the client or perform them in a way contrary to the
client's interest. For example, a lawyer should not enter into an agreement
whereby services are to be provided only up to a stated amount when it is
foreseeable that more extensive services probably will be required, unless the
situation is adequately explained to the client. Otherwise, the client might
have to bargain for further assistance in the midst of a proceeding or
transaction. However, it is proper to define the extent of services in light of
the client's ability to pay. A lawyer should not exploit a fee arrangement
based primarily on hourly charges by using wasteful procedures.
Prohibited Contingent Fees
[7] Paragraph (d) prohibits a lawyer from charging a contingent fee in a
domestic relations matter when payment is contingent upon the securing of a
divorce or upon the amount of alimony or support to be obtained. This provision
does not preclude a contract for a contingent fee for legal representation in
connection with the recovery of post-judgment balances due under support,
alimony or other financial orders because such contracts do not implicate the
same policy concerns.
Division of Fee
[8] A division of fee is a single billing to a
client covering the fee of two or more lawyers who are not in the same firm. A
division of fee facilitates association of more than one lawyer in a matter in
which neither alone could serve the client as well, and most often is used when
the fee is contingent and the division is between a referring lawyer and a
trial specialist. Paragraph (e) permits the lawyers to divide a fee either on
the basis of the proportion of services they render or if each lawyer assumes
responsibility for the representation as a whole. In addition, the client must
agree to the arrangement, including the share that each lawyer is to receive,
and the agreement must be confirmed in writing. A lawyer may divide a fee with
an out-of-state lawyer who refers a matter to the lawyer if the conditions of
paragraph (e) are satisfied. Contingent fee agreements must be in a writing signed by the client and must otherwise comply
with paragraph (c) of this Rule. Joint responsibility for the representation
entails financial and ethical responsibility for the representation as if the
lawyers were associated in a partnership. A lawyer should only refer a matter
to a lawyer whom the referring lawyer reasonably believes is competent to
handle the matter. See Rule 1.1.
[9] Paragraph (e) does not prohibit or regulate division of fees to be received
in the future for work done when lawyers were previously associated in a law
firm.
Disputes over Fees
[10] Participation in the fee dispute resolution program of the North
Carolina State Bar is mandatory when a client requests resolution of a disputed
fee. Before filing an action to collect a disputed fee, the client must be
advised of the fee dispute resolution program. Notification must occur not only
when there is a specific issue in dispute, but also when the client simply
fails to pay. However, when the client expressly acknowledges liability for the
specific amount of the bill and states that he or she cannot presently pay the
bill, the fee is not disputed and notification of the client is not required.
In making reasonable efforts to advise the client of the existence of the fee
dispute resolution program, it is preferable to address a written communication
to the client at the client's last known address. If the address of the client
is unknown, the lawyer should use reasonable efforts to acquire the current
address of the client. Notification is not required in those instances where
the State Bar does not have jurisdiction over the fee dispute as set forth in
27 N.C.A.C. 1D, .0702.
[11] If fee dispute resolution is requested by a client,
the lawyer must participate in the resolution process in good faith. The State
Bar program of fee dispute resolution uses mediation to resolve fee disputes as
an alternative to litigation. The lawyer must cooperate with the person who is
charged with investigating the dispute and with the person(s) appointed to
mediate the dispute. Further information on the fee dispute resolution program
can be found at 27 N.C.A.C. 1D, .0700, et. seq . The lawyer should
fully set forth his or her position and support that position by appropriate
documentation.
[12] A lawyer may petition a tribunal for a legal fee
if allowed by applicable law or, subject to the requirements for fee dispute
resolution set forth in Rule 1.5(f), may bring an action against a client to
collect a fee. The tribunal's determination of the merit of the petition or the
claim is reached by an application of law to fact and not by the application of
this Rule. Therefore, a tribunal's reduction or denial of a petition or claim
for a fee is not evidence that the fee request violates this Rule and is not
admissible in a disciplinary proceeding brought under this Rule.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 11. An attorney may accept an interest in land as a fee for title
examination and representation in an action to clear title.
CPR 37. An attorney may charge interest on delinquent accounts.
CPR 47. A Legal Aid Society may receive fees awarded by the court.
CPR 54. An attorney may submit a fee schedule to a savings and loan
association.
CPR 79. An attorney serving as a trustee in bankruptcy or as a fiduciary in
state proceedings may receive legal fees for acting as his own attorney.
CPR 129. An attorney may accept
payment of legal fees by credit card.
CPR 312. Contingent fees may be charged in equitable distribution cases.
CPR 375. An attorney may agree for his fee to be the interest earned on an
amount escrowed at a loan closing to guarantee completion of repairs.
RPC 2. Contingent fees may be
charged to collect liquidated amounts of past due child support.
RPC 7. An attorney may employ a
collection agency to collect a past due fee so long as the fee agreement out of
which the account arose was permitted by law and by the Rules of Professional
Conduct; the lawyer, at the time the underlying fee agreement was made, did not
believe, and had no reason to believe, that he was undertaking to represent a
client who was unable to afford his services; the legal services giving rise to
the fee out of which the account arose have been completed so that the lawyer
has no further responsibilities as the client's attorney; there is no genuine
dispute between the lawyer and the client about the existence, amount, or
delinquent status of the indebtedness; and the lawyer does not believe, and has
no reason to believe, that the agency which he employs will use any illegal
means to collect the account.
RPC 35. An attorney may not charge
an elevated contingent fee to collect "med-pay" or any other claim
with respect to which liability is clear and there is no real dispute as to the
amount due.
RPC 50. A lawyer may charge
nonrefundable retainers that are reasonable in amount. ( But
see2000 FEO 5)
RPC 52. Opinion describes
circumstances under which a lawyer who has been appointed to represent an
indigent person may accept payment directly from the client.
RPC 106. Opinion discusses
circumstances under which a refund of a prepaid fee is required.
RPC 107. A lawyer and her client may
agree to employ alternative dispute resolution procedures to resolve disputes
between themselves about legal fees.
RPC 141. An attorney's contingent
fee in a case resolved by a structured settlement should, if paid in a lump
sum, be calculated in terms of the settlement's present value.
RPC 148. A lawyer may not split a
fee with another lawyer who does not practice in her law firm unless the
division is based upon the work done by each lawyer or the client consents in
writing, the fee is reasonable, and responsibility is joint.
RPC 155. An attorney may charge a
contingent fee to collect delinquent child support.
RPC 158. A sum of money paid to a
lawyer in advance to secure payment of a fee which is yet to
be earned and to which the lawyer is not entitled must be deposited in
the lawyer's trust account.
RPC 166. A lawyer may seek to
renegotiate a fee agreement with a client provided he does not abandon or
threaten to abandon his client to cut his losses or to coerce a higher
fee.
RPC 174. A legal fee for the
collection of "med-pay" which is based upon the amount collected is
unreasonable.
RPC 190. A lawyer who agreed to bill
a client on the basis of hours expended may not bill the client on the same
basis for reused work product.
RPC 196. A law firm may not charge a
clearly excessive fee for legal representation even if the legal fee may be
recovered from an opposing party.
RPC 205. A lawyer may receive a fee
for referring a case to another lawyer provided that, by written agreement with
the client, both lawyers assume responsibility for the representation and the
total fee is reasonable.
RPC 222. Prior to the completion of
legal services for a client, a lawyer may not obtain a confession of judgment
from a client to secure a fee.
RPC 231. A lawyer may not collect a
contingent fee on the reimbursement paid to the client's medical insurance
provider in addition to a contingent fee on the gross recovery if the total fee
received by the lawyer is clearly excessive.
RPC 235. A lawyer may charge a
client an hourly rate, or a flat rate, for his or her services plus a
contingent fee on the client's recovery provided the ultimate fee paid by the
client is not clearly excessive and the client is given an honest assessment of
the potential for recovery.
RPC 247. Opinion provides guidelines
for receipt of payment of earned and unearned fees by electronic transfers.
97
Formal Ethics Opinion 4. Opinion provides that flat
fees may be collected at the beginning of a representation, treated as
presently owed to the lawyer, and deposited into the lawyer's general operating
account or paid to the lawyer but that if a collected fee is clearly excessive
under the circumstances of the representation a refund to the client of some or
all of the fee is required.
98
Formal Ethics Opinion 3. Opinion rules that, subject
to the requirements of law, a lawyer may add a finance charge to a client's
account if the client fails to pay the balance when due as agreed with the
client.
98
Formal Ethics Opinion 9. Opinion rules that a lawyer
may charge a client the actual cost of retrieving a closed client file from storage,
subject to certain conditions, provided the lawyer does not withhold the file
to extract payment.
98
Formal Ethics Opinion 14. Opinion rules that a lawyer
may participate in the solicitation of funds from third parties to pay the
legal fees of a client provided there is disclosure to contributors and the
funds are administered honestly.
99
Formal Ethics Opinion 1. Opinion rules that a lawyer
may not accept a referral fee or solicitor's fee for referring a client to an
investment advisor.
2000
Formal Ethics Opinion 5. Opinion rules that a lawyer
may not tell a client that any fee paid prior to the rendition of legal
services is "nonrefundable" although, by agreement with the client, a
lawyer may collect a flat fee for legal services to be rendered in the future
and treat the fee as earned immediately upon receipt subject to certain
conditions.
2000
Formal Ethics Opinion 7. Opinion rules that a lawyer
may not charge the client a legal fee for the time required to participate in
the State Bar's fee dispute resolution program.
2005
Formal Ethics Opinion 11. Opinion examines the
requirements for an interim account used to pay the costs for real estate
closings and also rules that the actual costs may be marked up by the lawyer
provided there is full disclosure and the overcharges are not clearly
excessive.
2005
Formal Ethics Opinion 12. Opinion explores a
lawyerÕs obligation to return legal fees when a third party is the payor.
2005
Formal Ethics Opinion 13. Opinion rules that a
minimum fee that will be billed against at an hourly rate and is collected at
the beginning of representation belongs to the client and must be deposited
into the trust account until earned and, upon termination of representation,
the unearned portion of the fee must be returned to the client.
2006
Formal Ethics Opinion 14. Opinion rules that when a
lawyer charges a fee for a consultation, and the lawyer accepts payment, there
is a client-lawyer relationship for the purposes of the Rules of Professional
Conduct.
2007
Formal Ethics Opinion 8. Opinion rules that a lawyer
may not charge a client for filing and presenting a motion to withdraw unless
withdrawal advances the clientÕs objectives for the representation or the
charge is approved by the court when ruling on a petition for legal fees from a
court-appointed lawyer.
2007
Formal Ethics Opinion 13. Opinion rules that, to
insure honest billing predicated on hourly charges, the lawyer must establish a
reasonable hourly rate for his services and for the services of his staff;
disclose the basis for the amounts to be charged; avoid wasteful, unnecessary,
or redundant procedures; and make certain that the total cost to the client is
not clearly excessive.
2008
Formal Ethics Opinion 8. A provision in a law firm
employment agreement for dividing legal fees received after a lawyer's
departure from a firm must be reasonable and may not penalize or deter the
withdrawing lawyer from taking clients with her.
2008
Formal Ethics Opinion 10. Opinion surveys prior ethics
opinions on legal fees, sets forth the ethical requirements for the different
types of fees paid in advance, authorizes minimum fees earned upon payment, and
provides model fee provisions.
2010
Formal Ethics Opinion 4. A lawyer may accept barter
dollars as payment for legal services but all advance payments of litigation
expenses by a barter exchange client must be paid in cash or by check or credit
card.
2010
Formal Ethics Opinion 6. If a lawyer associates
another law firm in connection with a legal matter, the lawyer may receive a
fee in proportion to the services he performs in the matter or he may receive a
fee based on his assumption of joint responsibility for the representation.
2010
Formal Ethics Opinion 10. A law firm may charge a
client for the expenses associated with a remote consultation, but may not
charge a flat fee for the remote consultation irrespective of the actual cost
to the firm.
2011
Formal Ethics Opinion 6. A law firm may contract with
a vendor of software as a service provided the lawyer uses reasonable care to
safeguard confidential client information.
CASE NOTES
Entitlement to Reasonable Value of Services. - An attorney discharged by
his client is entitled to recover the reasonable value of the services he has
already rendered. The reasonable value of such services is determined by the
totality of the circumstances of each case. O'Brien v. Plumides, 79 N.C. App. 159, 339 S.E.2d 54, cert.
dismissed ,
318 N.C. 409, 348 S.E.2d 805 (1986).
Plaintiff's attorney brought an action to recover a contingent fee in a
personal injury case where the client had discharged the attorney after he had
begun working on the client's case. The court held that the attorney was
entitled to the reasonable value of the services rendered before his discharge
by the client. Covington v. Rhodes, 38 N.C. App. 61, 247
S.E.2d 305 (1978) , disc. rev. denied , 296 N.C. 410, 251 S.E.2d 468
(1979).
Determination of Reasonable Fees. - Reasonable counsel
fees may be determined in part by the amount of the verdict obtained in a
condemnation proceeding in light of proposals made to the property owner prior
to his employment of an attorney. The results obtained by an attorney are a
legitimate consideration in determining the amount of his fee. Redevelopment
Comm'n v. Hyder , 20 N.C. App. 241, 201 S.E.2d 236 (1973).
The court refused to issue a temporary restraining order where lawyer in fee
dispute with client failed to follow the procedures of this section and there
was a state court action pending. Parker v. United States , 948
F. Supp. 24 (E.D.N.C. 1996).
Contingent Fee Contracts in Domestic Cases. - A contingent fee contract for
legal services in a divorce, alimony or child support proceeding is void. Thompson
v. Thompson ,
70 N.C. App. 147, 319 S.E.2d 315 (1984), rev'd
on other grounds , 313 N.C. 313, 328 S.E.2d 288 (1985).
Contingent Fee Contracts in Obtaining Equitable Distribution. - A contingent
fee contract for an attorney's services in obtaining an equitable distribution
is valid if the contract does not compensate the attorney for securing a
divorce for the same client. In Re Cooper ,
81 N.C. App. 27, 344 S.E.2d 27 (1986).
Contingent Contract Held Void. - Fee contract which provided
that the attorney would receive 20% of the total amount recovered in an action
for alimony and child support was void as against public policy. Townsend
v. Harris ,
102 N.C. App. 131, 401 S.E.2d 132, appeal dismissed , 328 N.C.
734, 404 S.E.2d 877, cert. denied , 502 U.S. 919,
112 S. Ct. 329 116 L. Ed. 2d. 270 (1991).
Quoted in Robinson, Bradshaw & Hinson, P.A. v. Smith , 139 N.C. App. 1, 532 S.E.2d
815 (2000).
Cited in West ex rel . Farris v. Tilley , 120 N.C. App. 145, 461
S.E.2d 1 (1995).
Client-Lawyer Relationship
Rule 1.6
Confidentiality of Information
(a) A lawyer shall not reveal information acquired during the
professional relationship with a client unless the client gives informed
consent, the disclosure is impliedly authorized in order to carry out the
representation or the disclosure is permitted by paragraph (b).
(b) A lawyer may reveal information protected from disclosure by paragraph (a)
to the extent the lawyer reasonably believes necessary:
(1) to
comply with the Rules of Professional Conduct, the law or court order;
(2) to prevent the commission of a crime by the client;
(3) to prevent reasonably certain death or bodily harm;
(4) to prevent, mitigate, or rectify the consequences of a client's criminal or
fraudulent act in the commission of which the lawyer's services were used;
(5) to secure legal advice about the lawyer's compliance with these Rules;
(6) to establish a claim or defense on behalf of the lawyer in a controversy
between the lawyer and the client; to establish a defense to a criminal charge
or civil claim against the lawyer based upon conduct in which the client was
involved; or to respond to allegations in any proceeding concerning the
lawyer's representation of the client; or
(7) to comply with the rules of a lawyers' or judges' assistance program
approved by the North Carolina State Bar or the North Carolina Supreme Court.
(c) The duty of confidentiality described in this Rule encompasses
information received by a lawyer then acting as an agent of a lawyers' or
judges' assistance program approved by the North Carolina State Bar or the
North Carolina Supreme Court regarding another lawyer or judge seeking assistance
or to whom assistance is being offered. For the purposes of this Rule,
"client" refers to lawyers seeking assistance from lawyers' or
judges' assistance programs approved by the North Carolina State Bar or the
North Carolina Supreme Court.
Comment
[1] This Rule governs the disclosure by a lawyer of information relating to the
representation of a client acquired during the lawyer's representation of the
client. See Rule 1.18 for the lawyer's duties with respect to information
provided to the lawyer by a prospective client, Rule 1.9(c)(2) for the lawyer's
duty not to reveal information acquired during a lawyer's prior representation
of a former client, and Rules 1.8(b) and 1.9(c)(1) for the lawyer's duties with
respect to the use of such information to the disadvantage of clients and
former clients.
[2] A fundamental principle in the client-lawyer relationship is that, in the
absence of the client's informed consent, the lawyer must not reveal
information acquired during the representation. See Rule 1.0(f) for the
definition of informed consent. This contributes to the trust that is the
hallmark of the client-lawyer relationship. The client is thereby encouraged to
seek legal assistance and to communicate fully and frankly with the lawyer even
as to embarrassing or legally damaging subject matter. The lawyer needs this
information to represent the client effectively and, if necessary, to advise the client to refrain from wrongful conduct. Almost
without exception, clients come to lawyers in order to determine their rights
and what is, in the complex of laws and regulations, deemed to be legal and
correct. Based upon experience, lawyers know that almost all clients follow the
advice given, and the law is upheld.
[3] The principle of client-lawyer confidentiality is given effect by related
bodies of law: the attorney-client privilege, the work product doctrine and the
rule of confidentiality established in professional ethics. The attorney-client
privilege and work-product doctrine apply in judicial and other proceedings in
which a lawyer may be called as a witness or otherwise required to produce
evidence concerning a client. The rule of client-lawyer confidentiality applies
in situations other than those where evidence is sought from the lawyer through
compulsion of law. The confidentiality rule, for example, applies not only to
matters communicated in confidence by the client but also to all information
acquired during the representation, whatever its source. A lawyer may not
disclose such information except as authorized or required by the Rules of
Professional Conduct or other law. See also Scope.
[4] Paragraph (a) prohibits a lawyer from revealing information acquired during
the representation of a client. This prohibition also applies to disclosures by
a lawyer that do not in themselves reveal protected information but could
reasonably lead to the discovery of such information by a third person. A
lawyer's use of a hypothetical to discuss issues relating to the representation
is permissible so long as there is no reasonable likelihood that the listener
will be able to ascertain the identity of the client or the situation involved.
Authorized Disclosure
[5] Except to the extent that the client's instructions or special
circumstances limit that authority, a lawyer is impliedly authorized to make
disclosures about a client when appropriate in carrying out the representation.
In some situations, for example, a lawyer may be impliedly authorized to admit
a fact that cannot properly be disputed or to make a disclosure that
facilitates a satisfactory conclusion to a matter. Lawyers in a firm may, in
the course of the firm's practice, disclose to each other information relating
to a client of the firm, unless the client has instructed that particular
information be confined to specified lawyers.
Disclosure Adverse to Client
[6] Although the public interest is usually best
served by a strict rule requiring lawyers to preserve the confidentiality of
information acquired during the representation of their clients, the
confidentiality rule is subject to limited exceptions. In becoming privy to
information about a client, a lawyer may foresee that the client intends to
commit a crime. Paragraph (b)(2) recognizes that a lawyer should be allowed to
make a disclosure to avoid sacrificing the interests of the potential victim in
favor of preserving the client's confidences when the client's purpose is
wrongful. Similarly, paragraph (b)(3) recognizes the overriding value of life
and physical integrity and permits disclosure reasonably necessary to prevent
reasonably certain death or substantial bodily harm. Such harm is reasonably
certain to occur if it will be suffered imminently or if there is a present and
substantial threat that a person will suffer such harm at a later date if the
lawyer fails to take action necessary to eliminate the threat. Thus, a lawyer
who knows that a client has accidentally discharged toxic waste into a town's
water supply may reveal this information to the authorities if there is a
present and substantial risk that a person who drinks the water will contract a
life-threatening or debilitating disease and the lawyer's disclosure is
necessary to eliminate the threat or reduce the number of victims.
[7] A lawyer may have been innocently involved in past conduct by a client that
was criminal or fraudulent. Even if the involvement was innocent, however, the
fact remains that the lawyer's professional services were made the instrument
of the client's crime or fraud. The lawyer, therefore, has a legitimate
interest in being able to rectify the consequences of such conduct, and has the
professional right, although not a professional duty, to rectify the situation.
Exercising that right may require revealing information acquired during the
representation. Paragraph (b)(4) gives the lawyer professional discretion to
reveal such information to the extent necessary to accomplish rectification.
[8] Although paragraph (b)(2) does not require the lawyer to reveal the
client's anticipated misconduct, the lawyer may not counsel or assist the
client in conduct the lawyer knows is criminal or fraudulent. See Rule
1.2(d). See also Rule 1.16 with respect to the lawyer's obligation or right to
withdraw from the representation of the client in such circumstances. Where the
client is an organization, the lawyer may be in doubt whether contemplated
conduct will actually be carried out by the organization. Where necessary to
guide conduct in connection with this Rule, the lawyer may make inquiry within
the organization as indicated in Rule 1.13(b).
[9] Paragraph (b)(4) addresses the situation in which the lawyer does not learn
of the client's crime or fraud until after it has been consummated. Although
the client no longer has the option of preventing disclosure by refraining from
the wrongful conduct, there will be situations in which the loss suffered by
the affected person can be prevented, rectified or mitigated. In such
situations, the lawyer may disclose information acquired during the
representation to the extent necessary to enable the affected persons to
prevent or mitigate reasonably certain losses or to attempt to recoup their
losses. Paragraph (b)(4) does not apply when a person who has committed a crime
or fraud thereafter employs a lawyer for representation concerning that
offense.
[10] A lawyer's confidentiality obligations do not preclude a lawyer from
securing confidential legal advice about the lawyer's personal responsibility
to comply with these Rules. In most situations, disclosing information to
secure such advice will be impliedly authorized for the lawyer to carry out the
representation. Even when the disclosure is not impliedly authorized, paragraph
(b)(5) permits such disclosure because of the importance of a lawyer's
compliance with the Rules of Professional Conduct.
[11] Where a legal claim or disciplinary charge alleges complicity of the
lawyer in a client's conduct or other misconduct of the lawyer involving
representation of the client, the lawyer may respond to the extent the lawyer
reasonably believes necessary to establish a defense. The same is true with
respect to a claim involving the conduct or representation of a former client.
Such a charge can arise in a civil, criminal, disciplinary or other proceeding
and can be based on a wrong allegedly committed by the lawyer against the
client or on a wrong alleged by a third person, for example, a person claiming
to have been defrauded by the lawyer and client acting together. The lawyer's
right to respond arises when an assertion of such complicity has been made.
Paragraph (b)(6) does not require the lawyer to await the commencement of an
action or proceeding that charges such complicity, so
that the defense may be established by responding directly to a third party who
has made such an assertion. The right to defend also applies, of course, where
a proceeding has been commenced.
[12] A lawyer entitled to a fee is permitted by paragraph (b)(6) to prove the
services rendered in an action to collect it. This aspect of the rule expresses
the principle that the beneficiary of a fiduciary relationship may not exploit
it to the detriment of the fiduciary.
[13] Other law may require that a lawyer disclose information about a client.
Whether such a law supersedes Rule 1.6 is a question of law beyond the scope of
these Rules. When disclosure of information acquired during the representation
appears to be required by other law, the lawyer must discuss the matter with
the client to the extent required by Rule 1.4. If, however, the other law
supersedes this Rule and requires disclosure, paragraph (b)(1) permits the
lawyer to make such disclosures as are necessary to comply with the law.
[14] Paragraph (b)(1) also permits compliance with a court order requiring a
lawyer to disclose information relating to a client's representation. If a
lawyer is called as a witness to give testimony concerning a client or is
otherwise ordered to reveal information relating to the client's
representation, however, the lawyer must, absent informed consent of the client
to do otherwise, assert on behalf of the client all nonfrivolous
claims that the information sought is protected against disclosure by the
attorney-client privilege or other applicable law. In the event of an adverse
ruling, the lawyer must consult with the client about the possibility of
appeal. See Rule 1.4. Unless review is sought, however,
paragraph (b)(1) permits the lawyer to comply with the court's order.
[15] Paragraph (b) permits disclosure only to the extent the lawyer reasonably
believes the disclosure is necessary to accomplish one of the purposes
specified. Where practicable, the lawyer should first seek to persuade the
client to take suitable action to obviate the need for disclosure. In any case,
a disclosure adverse to the client's interest should be no greater than the
lawyer reasonably believes necessary to accomplish the purpose. If the
disclosure will be made in connection with a judicial proceeding, the
disclosure should be made in a manner that limits access to the information to
the tribunal or other persons having a need to know it and appropriate
protective orders or other arrangements should be sought by the lawyer to the
fullest extent practicable.
[16] Paragraph (b) permits but does not require the disclosure of information
acquired during a client's representation to accomplish the purposes specified
in paragraphs (b)(1) through (b)(7). In exercising the discretion conferred by
this Rule, the lawyer may consider such factors as the nature of the lawyer's
relationship with the client and with those who might be injured by the client,
the lawyer's own involvement in the transaction and factors that may extenuate
the conduct in question. When practical, the lawyer should first seek to
persuade the client to take suitable action, making it unnecessary for the
lawyer to make any disclosure. A lawyer's decision not to disclose as permitted
by paragraph (b) does not violate this Rule. Disclosure may be required,
however, by other Rules. Some Rules require disclosure only if such disclosure
would be permitted by paragraph (b). See Rules 1.2(d), 4.1(b),
8.1 and 8.3. Rule 3.3, on the other hand, requires disclosure in some
circumstances regardless of whether such disclosure is permitted by this
Rule. See Rule 3.3(c).
Acting Competently to Preserve Confidentiality
[17] A lawyer must act competently to safeguard information acquired during
the representation of a client against inadvertent or unauthorized disclosure
by the lawyer or other persons who are participating in the representation of
the client or who are subject to the lawyer's supervision.See Rules 1.1, 5.1 and 5.3.
[18] When transmitting a communication that includes information acquired
during the representation of a client, the lawyer must take reasonable
precautions to prevent the information from coming into the hands of unintended
recipients. This duty, however, does not require that the lawyer use special
security measures if the method of communication
affords a reasonable expectation of privacy. Special circumstances, however,
may warrant special precautions. Factors to be considered in determining the
reasonableness of the client's expectation of confidentiality include the
sensitivity of the information and the extent to which the privacy of the
communication is protected by law or by a confidentiality agreement. A client
may require the lawyer to implement special security measures not required by
this Rule or may give informed consent to the use of a means of communication
that would otherwise be prohibited by this Rule.
Former Client
[19] The duty of confidentiality continues after
the client-lawyer relationship has terminated. SeeRule 1.9(c)(2). See Rule
1.9(c)(1) for the prohibition against using such information to the
disadvantage of the former client.
Lawyer's Assistance Program
[20] Information about a lawyer's or judge's misconduct or fitness may be
received by a lawyer in the course of that lawyer's participation in an
approved lawyers' or judges' assistance program. In that circumstance,
providing for the confidentiality of such information encourages lawyers and
judges to seek help through such programs. Conversely, without such
confidentiality, lawyers and judges may hesitate to seek assistance, which may
then result in harm to their professional careers and injury to their clients
and the public. The rule, therefore, requires that any information received by
a lawyer on behalf of an approved lawyers' or judges' assistance program be
regarded as confidential and protected from disclosure to the same extent as
information received by a lawyer in any conventional client-lawyer
relationship.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 284. An attorney who, in the course of representing one spouse, obtains
confidential information bearing upon the criminal conduct of the other spouse
must not disclose such information.
CPR 300. An attorney, after being discharged, cannot discuss the client's case
with the client's new attorney without the client's consent.
CPR 313. An attorney may not voluntarily disclose confidential information
concerning a client's criminal record.
CPR 362. An attorney may not disclose the perjury of his partner's
client.
CPR 374. Information concerning apparent tax fraud obtained by an attorney
employed by a fire insurer to depose insureds
concerning claims is confidential and may not be disclosed without the
insurer's consent.
RPC 12. An attorney may reveal
confidential information to correct a mistake if disclosure
is impliedly authorized by the client.
RPC 21. An attorney may send a
demand letter to an adverse party without identifying the client by name.
RPC 23. An attorney does not need
the consent of the client to file Form 1099 including confidential information
with the IRS incident to a real estate transaction since such is required by
law.
RPC 33. An attorney may not
disclose confidential information concerning the client's identity and criminal
record without the client's consent nor may an attorney misrepresent such
information to the court. In response to a direct question from the court
concerning such matters, an attorney may not misrepresent the defendant's
criminal record but is under no ethical obligation to respond. If the client
misrepresents his identity or record under oath, the attorney must ask the
client to correct the misstatements. If the client refuses, the attorney must
seek to withdraw. (But see Rule 3.3)
RPC 62. An attorney may disclose
client confidences necessary to protect her reputation where a claim alleging
malpractice is brought by a former client against the insurance company which employed the attorney to represent the former
client.
RPC 77. A lawyer may disclose
confidential information to his or her liability insurer to defend against a
claim but not for the sole purpose of assuring coverage.
RPC 113. A lawyer may disclose
information concerning advice given to a client at a closing in regard to the
significance of the client's lien affidavit.
RPC 117. An attorney may not reveal
confidential information concerning a client's contagious disease without the
client's consent.
RPC 120. An attorney may, but need
not necessarily, disclose confidential information concerning child abuse
pursuant to a statutory requirement.
RPC 133. A law firm may make its
waste paper available for recycling.
RPC 157. A lawyer may seek the
appointment of a guardian for a client the lawyer believes to be incompetent
but in so doing the lawyer may disclose only her belief that there exists a
good faith basis for the relief requested and may not disclose confidential
information which led her to conclude the client is incompetent.
RPC 175. A lawyer may ethically
exercise his or her discretion to decide whether to reveal confidential
information concerning child abuse or neglect pursuant to a statutory
requirement.
RPC 179. A lawyer must comply with
the client's request that the information regarding a settlement be kept
confidential if the client enters into a settlement agreement conditioned upon
maintaining the confidentiality of the terms of the settlement.
RPC 195. The attorney who
represented an estate and the personal representative in her official capacity
may divulge confidential information relating to the representation of the estate
and the personal representative to the substitute personal representative of
the estate.
RPC 206. A lawyer may disclose the
confidential information of a deceased client to the personal representative of
the client's estate but not to the heirs of the estate.
RPC 209. Opinion provides guidelines
for the disposal of closed client files.
RPC 215. When using a cellular or
cordless telephone or any other unsecure method of communication, a lawyer must
take steps to minimize the risk that confidential information may be
disclosed.
RPC 230. A lawyer representing a
client on a good faith claim for social security disability benefits may
withhold evidence of an adverse medical report in a hearing before an administrative
law judge if not required by law or court order to produce such evidence. ( But seeRule 3.3.)
RPC 244. Although a lawyer asks a
prospective client to sign a form stating that no client-lawyer relationship
will be created by reason of a free consultation with the lawyer, the lawyer
may not subsequently disclaim the creation of a client-lawyer relationship and
represent the opposing party.
RPC 246. Under certain
circumstances, a lawyer may not represent a party whose interests are opposed
to the interests of a prospective client if confidential information of the
prospective client must be used in the representation.
RPC 252. A lawyer in receipt of
materials that appear on their face to be subject to the attorney-client
privilege or otherwise confidential, which were inadvertently sent to the
lawyer by the opposing party or opposing counsel, should refrain from examining
the materials and return them to the sender.
98
Formal Ethics Opinion 5. Opinion rules that a defense
lawyer may remain silent while the prosecutor presents an inaccurate driving
record to the court provided the lawyer and client did not criminally or
fraudulently misrepresent the driving record to the prosecutor or the court,
and further provided, that on application for a limited driving privilege,
there is no misrepresentation to the court about the client's prior driving
record.
98
Formal Ethics Opinion 10. Opinion rules that an
insurance defense lawyer may not disclose confidential information about an
insured's representation in bills submitted to an independent audit company at
the insurance carrier's request unless the insured consents.
98
Formal Ethics Opinion 16. Opinion rules that a lawyer
may represent a person who is resisting an
incompetency petition although the person may suffer from a mental disability,
provided the lawyer determines that resisting the incompetency petition is not
frivolous.
98
Formal Ethics Opinion 18. Opinion rules that a lawyer
representing a minor owes the duty of confidentiality to the minor and may only
disclose confidential information to the minor's parent, without the minor's
consent, if the parent is the legal guardian of the minor and the disclosure of
the information is necessary to make a binding legal decision about the subject
matter of the representation.
98
Formal Ethics Opinion 20. Opinion rules that, subject
to a statute prohibiting the withholding of the information, a lawyer's duty to
disclose confidential client information to a bankruptcy court ends when the
case is closed although the debtor's duty to report new property continues for
180 days after the date of filing the petition.
99
Formal Ethics Opinion 11. Opinion rules that an
insurance defense lawyer may not submit billing information to an independent
audit company at the insurance carrier's request unless the insured's consent
to the disclosure, obtained by the insurance carrier, was informed.
99
Formal Ethics Opinion 15. Opinion rules that a lawyer
with knowledge that a former client is defrauding a bankruptcy court may reveal
the confidences of the former client if required by law or if necessary to
rectify the fraud.
2000
Formal Ethics Opinion 11. Opinion rules that a lawyer
who was formerly in-house legal counsel for a corporation must obtain the
permission of a court prior to disclosing confidential information of the
corporation to support a personal claim for wrongful termination.
2002
Formal Ethics Opinion 7. Opinion clarifies RPC 206 by
ruling that a lawyer may reveal the relevant confidential information of a
deceased client in a will contest proceeding if the attorney/client privilege
does not apply to the lawyer's testimony.
2004 FEO 6 - Opinion rules that a lawyer may disclose confidential
client information to collect a fee, including information necessary to support
a claim that the corporate veil should be pierced, provided the claim is
advanced in good faith.
2005
Formal Ethics Opinion 9. Opinion rules that a
lawyer for a publicly traded company does not violate the Rules of Professional
Conduct if the lawyer Òreports outÓ confidential information as permitted by
SEC regulations.
2007
Formal Ethics Opinion 2. Opinion rules that a lawyer
may not take possession of a clientÕs contraband if possession is itself a
crime and, unless there is an exception allowing disclosure of confidential
information, the lawyer may not disclose confidential information relative to
the contraband.
2007
Formal Ethics Opinion 12. A lawyer may outsource
limited legal support services to a foreign lawyer or a nonlawyer
(collectively "foreign assistants") provided the lawyer properly
selects and supervises the foreign assistants, ensures the preservation of
client confidences, avoids conflicts of interests, discloses the outsourcing,
and obtains the client's advanced informed consent.
2008
Formal Ethics Opinion 1. A lawyer representing an
undocumented worker in a workers' compensation action has a duty to correct
court documents containing false statements of material fact and is prohibited
from introducing evidence in support of the proposition that an alias is the
client's legal name.
2008
Formal Ethics Opinion 3. A lawyer may assist a pro se
litigant by drafting pleadings and giving advice without making an appearance
in the proceeding and without disclosing or ensuring the disclosure of his assistance
to the court unless required to do so by law or court order.
2008
Formal Ethics Opinion 5. Client files may be stored
on a website accessible by clients via the internet
provided the confidentiality of all client information on the website is
protected.
2008
Formal Ethics Opinion 13. Unless affected clients
expressly consent to the disclosure of their confidential information, a lawyer
may allow a title insurer to audit the lawyer's real estate trust account and
reconciliation reports only if certain written assurances to protect client
confidences are obtained from the title insurer, the audited account is only
used for real estate closings and the audit is limited to certain records and
to real estate transactions insured by the title insurer.
2009
Formal Ethics Opinion 1. A lawyer must use reasonable
care to prevent the disclosure of confidential client information hidden in
metadata when transmitting an electronic communication and a lawyer who
receives an electronic communication from another party or another party's
lawyer must refrain from searching for and using confidential information found
in the metadata embedded in the document.
2009
Formal Ethics Opinion 3. A lawyer has a professional
obligation not to encourage or allow a nonlawyer
employee to disclose confidences of a previous employer's clients for purposes
of solicitation.
2010
Formal Ethics Opinion 12. A hiring law firm may ask an
incoming law school graduate to provide sufficient information as to his prior
legal experience so that the hiring law firm can identify potential conflicts
of interest.
2011
Formal Ethics Opinion 6. A law firm may contract with
a vendor of software as a service provided the lawyer uses reasonable care to
safeguard confidential client information.
2011
Formal Ethics Opinion 16. A criminal defense lawyer
accused of ineffective assistance of counsel by a former client may share
confidential client information with prosecutors to help establish a defense to
the claim so long as the lawyer reasonably believes a response is necessary and
the response is narrowly tailored to respond to the allegations.
CASE NOTES
Statement to Insurance Adjuster. - The attorney-client privilege does
not cover a statement made to an insurance adjuster, not in the presence or at
the request of counsel, and even before an attorney-client relationship
exists. Phillips v. Dallas Carrier Corp ., 133 F.R.D. 475 (M.D.N.C.
1990).
Law firm was disqualified from representing plaintiff computer company in
copyright case against another company which hired three of plaintiff's
engineers where the law firm had previously represented one of the
engineers. Robert Woodhead, Inc. v. Datawatch Corp. , 934 F. Supp. 181 (E.D.N.C. 1995).
Applied in SuperGuide Corp. v. DirecTV
Enters., Inc. , 141 F. Supp. 2d 616 (W.D.N.C.
2001).
Quoted in Travco Hotels, Inc. v.
Piedmont Natural Gas Co .,
332 N.C. 288, 420 S.E.2d 426 (1992).
Stated in Furbush v. Otsego Mach.
Shop, Inc., 914 F. Supp. 1275 (E.D.N.C. 1996).
Client-Lawyer Relationship
Rule 1.7
Conflict of Interest: Current Clients
(a) Except as provided in paragraph (b), a lawyer shall not
represent a client if the representation involves a concurrent conflict of
interest. A concurrent conflict of interest exists if:
(1) the
representation of one client will be directly adverse to another client; or
(2) the representation of one or more clients may be materially limited by the
lawyer's responsibilities to another client, a former client, or a third person,
or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of
interest under paragraph (a), a lawyer may represent a client if:
(1) the
lawyer reasonably believes that the lawyer will be able to provide competent
and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one client
against another client represented by the lawyer in the same litigation or
other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.
Comment
General Principles
[1] Loyalty and independent judgment are essential elements in the lawyer's
relationship to a client. Concurrent conflicts of interest can arise from the
lawyer's responsibilities to another client, a former client or a third person
or from the lawyer's own interests. For specific Rules regarding certain
concurrent conflicts of interest, see Rule 1.8. For former client conflicts of
interest, see Rule 1.9. For conflicts of interest involving prospective
clients, see Rule 1.18. For definitions of "informed consent" and
"confirmed in writing," see Rule 1.0(f) and (c).
[2] Resolution of a conflict of interest problem under this Rule requires the
lawyer to: 1) clearly identify the client or clients; 2) determine whether a
conflict of interest exists; 3) decide whether the representation may be
undertaken despite the existence of a conflict, i.e., whether the conflict is consentable; and 4) if so, consult with the clients
affected under paragraph (a) and obtain their informed consent, confirmed in
writing. The clients affected under paragraph (a) include both of the clients
referred to in paragraph (a)(1) and the one or more clients whose
representation might be materially limited under paragraph (a)(2).
[3] A conflict of interest may exist before representation is undertaken, in
which event the representation must be declined, unless the lawyer obtains the
informed consent of each client under the conditions of paragraph (b). To
determine whether a conflict of interest exists, a lawyer should adopt
reasonable procedures, appropriate for the size and type of firm and practice,
to determine in both litigation and non-litigation matters the persons and
issues involved. See alsoComment to Rule 5.1. Ignorance caused by a failure to
institute such procedures will not excuse a lawyer's violation of this Rule. As
to whether a client-lawyer relationship exists or, having once been
established, is continuing, see Comment to Rule 1.3 and Scope.
[4] If a conflict arises after representation has been undertaken, the lawyer
ordinarily must withdraw from the representation, unless the lawyer has
obtained the informed consent of the client under the conditions of paragraph
(b). See Rule 1.16. Where more than one client is involved,
whether the lawyer may continue to represent any of the clients is determined
both by the lawyer's ability to comply with duties owed to the former client
and by the lawyer's ability to represent adequately the remaining client or
clients, given the lawyer's duties to the former client. See Rule
1.9. See also Comments [5] and [29] to this Rule.
[5] Unforeseeable developments, such as changes in corporate and other
organizational affiliations or the addition or realignment of parties in
litigation, might create conflicts in the midst of a representation, as when a
company sued by the lawyer on behalf of one client is bought by another client
represented by the lawyer in an unrelated matter. Depending on the
circumstances, the lawyer may have the option to withdraw from one of the
representations in order to avoid the conflict. The withdrawing lawyer must
seek court approval where necessary and take steps to minimize harm to the
clients. See Rule 1.16. The lawyer must continue to protect
the confidences of the client from whose representation the lawyer has
withdrawn. SeeRule 1.9(c).
Identifying Conflicts of Interest: Directly Adverse
[6] Loyalty to a current client prohibits undertaking representation
directly adverse to that client without that client's informed consent. Thus,
absent consent, a lawyer may not act as an advocate in one matter against a
person the lawyer represents in some other matter, even when the matters are
wholly unrelated. The client as to whom the representation is directly adverse
is likely to feel betrayed, and the resulting damage to the client-lawyer
relationship is likely to impair the lawyer's ability to represent the client
effectively. In addition, the client on whose behalf the adverse representation
is undertaken reasonably may fear that the lawyer will pursue that client's
case less effectively out of deference to the other client, i.e., that the
representation may be materially limited by the lawyer's interest in retaining
the current client. Similarly, a directly adverse conflict may arise when a
lawyer is required to cross-examine a client who appears as a witness in a
lawsuit involving another client, as when the testimony will be damaging to the
client who is represented in the lawsuit. On the other hand, simultaneous
representation in unrelated matters of clients whose interests are only
economically adverse, such as representation of competing economic enterprises
in unrelated litigation, does not ordinarily constitute a conflict of interest
and thus may not require consent of the respective clients.
[7] Directly adverse conflicts can also arise in transactional matters. For
example, if a lawyer is asked to represent the seller of a business in
negotiations with a buyer represented by the lawyer, not in the same
transaction but in another, unrelated matter, the lawyer could not undertake
the representation without the informed consent of each client.
Identifying Conflicts of Interest: Material Limitation
[8] Even where there is no direct adverseness, a conflict of interest
exists if a lawyer's ability to consider, recommend or carry out an appropriate
course of action for the client may be materially limited as a result of the
lawyer's other responsibilities or interests. For example, a lawyer asked to
represent a seller of commercial real estate, a real estate developer and a
commercial lender is likely to be materially limited in the lawyer's ability to
recommend or advocate all possible positions that each might take because of
the lawyer's duty of loyalty to the others. The conflict in effect forecloses
alternatives that would otherwise be available to the client. The mere
possibility of subsequent harm does not itself preclude the representation or
require disclosure and consent. The critical questions are the likelihood that
a difference in interests will eventuate and, if it does, whether it will
materially interfere with the lawyer's independent professional judgment in considering
alternatives or foreclose courses of action that reasonably should be pursued
on behalf of the client.
Lawyer's Responsibilities to Former Clients and Other Third Persons
[9] In addition to conflicts with other current clients, a lawyer's duties of
loyalty and independence may be materially limited by responsibilities to
former clients under Rule 1.9 or by the lawyer's responsibilities to other
persons, such as fiduciary duties arising from a lawyer's service as a trustee,
executor or corporate director.
Personal Interest Conflicts
[10] The lawyer's own interests should not be permitted to have an adverse
effect on representation of a client. For example, if the probity of a lawyer's
own conduct in a transaction is in serious question, it may be difficult or
impossible for the lawyer to give a client detached advice. Similarly, when a
lawyer has discussions concerning possible employment with an opponent of the
lawyer's client, or with a law firm representing the opponent, such discussions
could materially limit the lawyer's representation of the client. In addition,
a lawyer may not allow related business interests to affect representation, for
example, by referring clients to an enterprise in which the lawyer has an
undisclosed financial interest. See Rule 1.8 for specific Rules pertaining to a
number of personal interest conflicts, including business transactions with
clients. See also Rule 1.10 (personal interest conflicts under Rule 1.7
ordinarily are not imputed to other lawyers in a law firm).
[11] When lawyers representing different clients in the same matter or in
substantially related matters are closely related by blood or marriage, there
may be a significant risk that client confidences will be revealed and that the
lawyer's family relationship will interfere with both loyalty and independent
professional judgment. As a result, each client is entitled to know of the
existence and implications of the relationship between the lawyers before the
lawyer agrees to undertake the representation. Thus, a lawyer related to
another lawyer, e.g., as parent, child, sibling or spouse, ordinarily may not
represent a client in a matter where that lawyer is representing another party,
unless each client gives informed consent. The disqualification arising from a
close family relationship is personal and ordinarily is not imputed to members
of firms with whom the lawyers are associated. See Rule 1.10.
[12] A lawyer is prohibited from engaging in sexual relationships with a client
unless the sexual relationship predates the formation of the client-lawyer
relationship. See Rule 1.19.
Interest of Person Paying for a Lawyer's Service
[13] A lawyer may be paid from a source other than the client, including a
co-client, if the client is informed of that fact and consents and the
arrangement does not compromise the lawyer's duty of loyalty or independent
judgment to the client. See Rule 1.8(f). If acceptance of the
payment from any other source presents a significant risk that the lawyer's
representation of the client will be materially limited by the lawyer's own
interest in accommodating the person paying the lawyer's fee or by the lawyer's
responsibilities to a payer who is also a co-client, then the lawyer must
comply with the requirements of paragraph (b) before accepting the
representation, including determining whether the conflict is consentable and, if so, that the client has adequate
information about the material risks of the representation.
Prohibited Representations
[14] Ordinarily, clients may consent to representation notwithstanding a
conflict. However, as indicated in paragraph (b), some conflicts are nonconsentable, meaning that the lawyer involved cannot
properly ask for such agreement or provide representation on the basis of the
client's consent. When the lawyer is representing more than one client, the
question of consentability must be resolved as to
each client.
[15] Consentability is typically determined by
considering whether the interests of the clients will be adequately protected
if the clients are permitted to give their informed consent to representation
burdened by a conflict of interest. Thus, under paragraph (b)(1),
representation is prohibited if in the circumstances the lawyer cannot
reasonably conclude that the lawyer will be able to provide competent and
diligent representation. See Rule 1.1 (competence) and Rule
1.3 (diligence).
[16] Paragraph (b)(2) describes conflicts that are nonconsentable
because the representation is prohibited by applicable law. For example, in some
states substantive law provides that the same lawyer may not represent more
than one defendant in a capital case, even with the consent of the clients, and
under federal criminal statutes certain representations by a former government
lawyer are prohibited, despite the informed consent of the former client. In
addition, decisional law in some states limits the ability of a governmental
client, such as a municipality, to consent to a conflict of interest.
[17] Paragraph (b)(3) describes conflicts that are nonconsentable
because of the institutional interest in vigorous development of each client's
position when the clients are aligned directly against each other in the same
litigation or other proceeding before a tribunal. Whether clients are aligned
directly against each other within the meaning of this paragraph requires
examination of the context of the proceeding. Although this paragraph does not
preclude a lawyer's multiple representation of adverse parties to a mediation (because mediation is not a proceeding before a
"tribunal" under Rule 1.0(n)), such representation may be precluded
by paragraph (b)(1).
Informed Consent
[18] Informed consent requires that each affected client be aware of the
relevant circumstances and of the material and reasonably foreseeable ways that
the conflict could have adverse effects on the interests of that client. See Rule
1.0(f) (informed consent). The information required depends on the nature of
the conflict and the nature of the risks involved. When representation of
multiple clients in a single matter is undertaken, the information must include
the implications of the common representation, including possible effects on
loyalty, confidentiality and the attorney-client privilege and the advantages
and risks involved. See Comments [30] and [31] (effect of
common representation on confidentiality).
[19] Under some circumstances it may be impossible to make the disclosure
necessary to obtain consent. For example, when the lawyer represents different
clients in related matters and one of the clients
refuses to consent to the disclosure necessary to permit the other client to
make an informed decision, the lawyer cannot properly ask the latter to
consent. In some cases the alternative to common representation can be that each
party may have to obtain separate representation with the possibility of
incurring additional costs. These costs, along with the benefits of securing
separate representation, are factors that may be considered by the affected
client in determining whether common representation is in the client's
interests.
Consent Confirmed in Writing
[20] Paragraph (b) requires the lawyer to obtain the informed consent of
the client, confirmed in writing. Such a writing may
consist of a document executed by the client or one that the lawyer promptly
records and transmits to the client following an oral consent. See Rule
1.0(c). See alsoRule
1.0(o) (writing includes electronic transmission). If it is not feasible to
obtain or transmit the writing at the time the client gives informed consent,
then the lawyer must obtain or transmit it within a reasonable time
thereafter. See Rule 1.0(c). The requirement of a writing does
not supplant the need in most cases for the lawyer to talk with the client, to
explain the risks and advantages, if any, of representation burdened with a
conflict of interest, as well as reasonably available alternatives, and to
afford the client a reasonable opportunity to consider the risks and
alternatives and to raise questions and concerns. Rather, the writing is
required in order to impress upon clients the seriousness of the decision the
client is being asked to make and to avoid disputes or ambiguities that might
later occur in the absence of a writing.
Revoking Consent
[21] A client who has given consent to a conflict may revoke the consent
and, like any other client, may terminate the lawyer's representation at any
time. Whether revoking consent to the client's own representation precludes the
lawyer from continuing to represent other clients depends on the circumstances,
including the nature of the conflict, whether the client revoked consent
because of a material change in circumstances, the reasonable expectations of
the other client and whether material detriment to the other clients or the
lawyer would result.
Consent to Future Conflict
[22] Whether a lawyer may properly request a
client to waive conflicts that might arise in the future is subject to the test
of paragraph (b). The effectiveness of such waivers is generally determined by the
extent to which the client reasonably understands the material risks that the
waiver entails. The more comprehensive the explanation of the
types of future representations that might arise and the actual and reasonably
foreseeable adverse consequences of those representations, the greater the
likelihood that the client will have the requisite understanding. Thus,
if the client agrees to consent to a particular type of conflict with which the
client is already familiar, then the consent ordinarily will be effective with
regard to that type of conflict. If the consent is general and open-ended, then
the consent ordinarily will be ineffective, because it is not reasonably likely
that the client will have understood the material risks involved. On the other hand,
if the client is an experienced user of the legal services involved and is
reasonably informed regarding the risk that a conflict may arise, such consent
is more likely to be effective, particularly if, e.g., the client is
independently represented by other counsel in giving consent and the consent is
limited to future conflicts unrelated to the subject of the representation. In
any case, advance consent cannot be effective if the circumstances that
materialize in the future are such as would make the conflict nonconsentable under paragraph (b).
Conflicts in Litigation
[23] Paragraph (b)(3) prohibits representation of opposing parties in the
same litigation, regardless of the clients' consent. On the other hand,
simultaneous representation of parties whose interests in litigation may
conflict, such as coplaintiffs or codefendants, is
governed by paragraph (a)(2). A conflict may exist by reason of substantial
discrepancy in the parties' testimony, incompatibility in positions in relation
to an opposing party or the fact that there are substantially different
possibilities of settlement of the claims or liabilities in question. Such
conflicts can arise in criminal cases as well as civil. The potential for
conflict of interest in representing multiple defendants in a criminal case is
so grave that ordinarily a lawyer should decline to represent more than one
codefendant. On the other hand, common representation of persons having similar
interests in civil litigation is proper if the requirements of paragraph (b)
are met.
[24] Ordinarily a lawyer may take inconsistent legal positions in different
tribunals at different times on behalf of different clients. The mere fact that
advocating a legal position on behalf of one client might create precedent
adverse to the interests of a client represented by the lawyer in an unrelated
matter does not create a conflict of interest. A conflict of interest exists,
however, if there is a significant risk that a lawyer's action on behalf of one
client will materially limit the lawyer's effectiveness in representing another
client in a different case; for example, when a decision favoring one client
will create a precedent likely to seriously weaken the position taken on behalf
of the other client. Factors relevant in determining whether the clients need
to be advised of the risk include: where the cases are pending, whether the
issue is substantive or procedural, the temporal relationship between the
matters, the significance of the issue to the immediate and long-term interests
of the clients involved and the clients' reasonable expectations in retaining
the lawyer. If there is significant risk of material limitation, then absent
informed consent of the affected clients, the lawyer must refuse one of the
representations or withdraw from one or both matters.
[25] When a lawyer represents or seeks to represent a class of plaintiffs or
defendants in a class-action lawsuit, unnamed members of the class are
ordinarily not considered to be clients of the lawyer for purposes of applying
paragraph (a)(1) of this Rule. Thus, the lawyer does not typically need to get
the consent of such a person before representing a client suing the person in
an unrelated matter. Similarly, a lawyer seeking to represent an opponent in a
class action does not typically need the consent of an unnamed member of the
class whom the lawyer represents in an unrelated matter.
Nonlitigation Conflicts
[26] Conflicts of interest under paragraphs (a)(1) and (a)(2) arise in
contexts other than litigation. For a discussion of directly adverse
conflicts in transactional matters, see Comment [7]. Relevant factors in
determining whether there is significant potential for material limitation
include the duration and intimacy of the lawyer's relationship with the client
or clients involved, the functions being performed by the lawyer, the
likelihood that disagreements will arise and the likely prejudice to the client
from the conflict. The question is often one of proximity and degree.See Comment
[8].
[27] For example, conflict questions may arise in estate planning and estate
administration. A lawyer may be called upon to prepare wills for several family
members, such as husband and wife, and, depending upon the circumstances, a
conflict of interest may be present. In estate administration the identity of
the client may be unclear under the law of a particular jurisdiction. Under one view, the client is the fiduciary; under another
view the client is the estate or trust, including its beneficiaries. In order
to comply with conflict of interest rules, the lawyer should make clear the
lawyer's relationship to the parties involved.
[28] Whether a conflict is consentable depends on the
circumstances. See Comment [15]. For example, a lawyer may not
represent multiple parties to a negotiation whose interests are fundamentally
antagonistic to each other, but common representation is permissible where the
clients are generally aligned in interest even though there is some difference
in interest among them. Thus, a lawyer may seek to establish or adjust a
relationship between clients on an amicable and mutually advantageous basis;
for example, in helping to organize a business in which two or more clients are
entrepreneurs, working out the financial reorganization of an enterprise in
which two or more clients have an interest or arranging a property distribution
in settlement of an estate. The lawyer seeks to resolve potentially adverse
interests by developing the parties' mutual interests. Otherwise, each party
might have to obtain separate representation, with the possibility of incurring
additional cost, complication or even litigation. Given these and other
relevant factors, the clients may prefer that the lawyer act for all of them.
Special Considerations in Common Representation
[29] In considering whether to represent multiple clients in the same
matter, a lawyer should be mindful that if the common representation fails
because the potentially adverse interests cannot be reconciled, the result can
be additional cost, embarrassment and recrimination. Ordinarily, the lawyer
will be forced to withdraw from representing all of the clients if the common
representation fails. In some situations, the risk of failure is so great that
multiple representation is plainly impossible. For
example, a lawyer cannot undertake common representation of clients where
contentious litigation or negotiations between them are imminent or
contemplated. Moreover, because the lawyer is required to be impartial between
commonly represented clients, representation of multiple clients is improper
when it is unlikely that impartiality can be maintained. Generally, if the
relationship between the parties has already assumed antagonism, the
possibility that the clients' interests can be adequately served by common
representation is not very good. Other relevant factors are whether the lawyer
subsequently will represent both parties on a continuing basis and whether the
situation involves creating or terminating a relationship between the parties.
[30] A particularly important factor in determining the appropriateness of
common representation is the effect on client-lawyer confidentiality and the
attorney-client privilege. With regard to the attorney-client privilege, the
prevailing rule is that, as between commonly represented clients, the privilege
does not attach. Hence, it must be assumed that if litigation eventuates
between the clients, the privilege will not protect any such communications,
and the clients should be so advised.
[31] As to the duty of confidentiality, continued common representation will
almost certainly be inadequate if one client asks the lawyer not to disclose to
the other client information relevant to the common representation. This is so
because the lawyer has an equal duty of loyalty to each client, and each client
has the right to be informed of anything bearing on the representation that
might affect that client's interests and the right to expect that the lawyer
will use that information to that client's benefit. See Rule
1.4. The lawyer should, at the outset of the common representation and as part
of the process of obtaining each client's informed consent, advise each client
that information will be shared and that the lawyer will have to withdraw if
one client decides that some matter material to the representation should be
kept from the other. In limited circumstances, it may be appropriate for the
lawyer to proceed with the representation when the clients have agreed, after
being properly informed, that the lawyer will keep certain information
confidential. For example, the lawyer may reasonably conclude that failure to
disclose one client's trade secrets to another client will not adversely affect
representation involving a joint venture between the clients and agree to keep that
information confidential with the informed consent of both clients.
[32] When seeking to establish or adjust a relationship between clients, the
lawyer should make clear that the lawyer's role is not that of partisanship
normally expected in other circumstances and, thus, that the clients may be
required to assume greater responsibility for decisions than when each client
is separately represented. Any limitations on the scope of the representation
made necessary as a result of the common representation should be fully
explained to the clients at the outset of the representation. See Rule
1.2(c).
[33] Subject to the above limitations, each client in the common representation
has the right to loyal and diligent representation and the protection of Rule
1.9 concerning the obligations to a former client. The client also has the
right to discharge the lawyer as stated in Rule 1.16.
Organizational Clients
[34] A lawyer who represents a corporation or
other organization does not, by virtue of that representation, necessarily
represent any constituent or affiliated organization, such as a parent or
subsidiary. See Rule 1.13(a). Thus, the lawyer for an
organization is not barred from accepting representation adverse to an
affiliate in an unrelated matter, unless the circumstances are such that the
affiliate should also be considered a client of the lawyer, there is an
understanding between the lawyer and the organizational client that the lawyer
will avoid representation adverse to the client's affiliates, or the lawyer's
obligations to either the organizational client or the new client are likely to
limit materially the lawyer's representation of the other client.
[35] A lawyer for a corporation or other organization who is also a member of
its board of directors should determine whether the responsibilities of the two
roles may conflict. The lawyer may be called on to advise the corporation in matters involving actions of the
directors. Consideration should be given to the frequency with which such
situations may arise, the potential intensity of the conflict, the effect of
the lawyer's resignation from the board and the possibility of the
corporation's obtaining legal advice from another lawyer in such situations. If
there is material risk that the dual role will compromise the lawyer's
independence of professional judgment, the lawyer should not serve as a
director or should cease to act as the corporation's lawyer when conflicts of
interest arise. The lawyer should advise the other members of the board that in
some circumstances matters discussed at board meetings while the lawyer is
present in the capacity of director might not be protected by the
attorney-client privilege and that conflict of interest considerations might
require the lawyer's recusal as a director or might require the lawyer and the
lawyer's firm to decline representation of the corporation in a matter.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
I. GENERALCONFLICTS
CPR 9. An attorney may not give a title opinion to an individual and then
represent another person in a boundary dispute against that individual.
CPR 15. A lawyer/guardian may not
give a title opinion to the purchaser of his ward's property.
CPR 46. Once it is determined that attorneys from same firm have undertaken to
represent adverse parties, one must withdraw and the other may continue only
with the consent of all involved.
CPR 55. An attorney appointed as examiner of title is not prohibited from
representing petitioners or respondents in actions unrelated to
the Torrens proceeding.
CPR 147. An attorney cannot defend an action brought by a former client when
confidential information obtained during the prior representation would be
relevant to the defense of the current action.
CPR 171. A part-time county attorney may not serve as guardian ad litem if
official duties include advising Department of Social Services.
CPR 179. An attorney may not represent a municipality and a distributee
of an estate suing the municipality.
CPR 216. An attorney may not serve as receiver and as attorney for a judgment
creditor.
CPR 249. An attorney who owns an insurance agency may not represent claimants
against persons insured by companies his agency represents.
CPR 255. An attorney who is employed
by an insurer to defend its insureds on a regular
basis represents the insurer and the insureds and, if
a conflict develops between the insurer and an insured, the attorney has a duty
to advise the insured to seek independent counsel. The attorney may represent a
plaintiff against the insurer, but he or she should notify the insurer and have
the informed consent of plaintiff.
CPR 281. An attorney may sue another attorney for malpractice on behalf of a
client even though the attorney for the plaintiff owns stock in the defendant's
liability insurance company.
CPR 286. An attorney may participate in a mediation service with marriage
counselors but should not later represent either party in domestic
litigation.
CPR 317. An attorney appointed to represent a state official or agency may not
represent other clients in a suit against the same official or agency, another
official or agency under the jurisdiction of that same official or agency or
another official or agency with authority over the official or agency. Nor
should an attorney represent one official or agency while representing other
clients against another official or agency if both of the officials or agencies
are under the jurisdiction of the same official or agency.
CPR 323. An attorney may not act as a friend and attempt to mediate a domestic
problem and later represent the wife in domestic litigation.
CPR 344. An attorney for a school board is not automatically disqualified from
representing criminal defendants despite the school board's interest in fines
and forfeitures.
RPC 18. An attorney may not
simultaneously represent shareholders in a derivative action and the
corporation's landlord on a claim for back rent.
RPC 22. An attorney may not
represent the administratrix officially and
personally where her interests in the two roles are in conflict without the
consent of the heirs.
RPC 24. An attorney may not
purchase his client's property at an execution sale on his own account.
RPC 28. An attorney may represent
the estate of pilot and the estate of passenger in a wrongful death case
against the airplane manufacturer if attorney is convinced that there was no
pilot negligence and if the representatives of both estates consent.
RPC 54. A lawyer who represents a
criminal defendant from whose possession property was seized may not without
consent seek the property as a fine or forfeiture on behalf of the local school
board.
RPC 55. A member of the Attorney
General's staff may prosecute appeals of adverse Medicaid decisions against the
Department of Human Resources, which is represented by another member of the
Attorney General's staff.
RPC 56. A lawyer may represent a
plaintiff against an insurance company's insured while defending other persons
insured by the company in unrelated matters.
RPC 59. A lawyer may represent an
insurer and its insured as co-plaintiffs in a declaratory judgment
action.
RPC 60. Subject to general conflict
of interest rules, a lawyer may represent police officers who
are referred by a professional organization of which they are members on a
case-by-case basis and also represent criminal defendants.
RPC 65. The public defender's
office should be considered as a single law firm and staff attorneys may not
represent codefendants with conflicting interests unless both consent and can
be adequately represented.
RPC 72. An attorney hired by the
Bureau of Indian Affairs to prosecute criminal charges before a tribal court
may represent defendants in state or federal court despite the fact that the
defendants have been arrested by members of the tribal police force.
RPC 73. Opinion clarifies two lines
of authority in prior ethics opinions. Where an attorney serves on a governing
body, such as a county commission, the attorney is disqualified from
representing criminal defendants where a member of the sheriff's department is
a prosecuting witness. The attorney's partners are not disqualified.
Where an attorney advises a governing body, such as a county commission, but is
not a commissioner herself, and in that capacity represents the sheriff's
department relative to criminal matters, the attorney may not represent
criminal defendants if a member of the sheriff's department will be a
prosecuting witness. In this situation the attorney's partners would also be
disqualified from representing the criminal defendants.
RPC 74. A firm
which employs a paralegal is not disqualified from representing an
interest adverse to that of a party represented by the firm for which the
paralegal previously worked if the paralegal is screened from participation in
the case.
RPC 91. An attorney employed by the
insurer to represent the insured and its own interests may not send the insurer
a letter on behalf of the insured demanding settlement within the policy
limits.
RPC 92. An attorney representing
both the insurer and the insured need not surrender to the insured copies of
all correspondence concerning the case between herself
and the insurer.
RPC 95. An assistant district
attorney may prosecute cases while serving on the school board.
RPC 100. An attorney serving on a
hospital ethics committee is not automatically disqualified from representing
interests adverse to the hospital or its staff physicians.
RPC 102. A lawyer may not permit the
employment of court reporting services to be influenced by the possibility that
the lawyer's employees might receive premiums, prizes or other personal
benefits.
RPC 103. A lawyer for the insured
and the insurer may not enter voluntary dismissal of the insured's counterclaim
without the insured's consent.
RPC 105. A public defender may
represent criminal defendants while serving on the school board.
RPC 109. An attorney may not
represent parents as guardians ad litem for their
injured child and as individuals concerning their related tort claims after
having received a joint settlement offer which is insufficient to fully satisfy
all claims.
RPC 110. An attorney employed by an
insurer to defend in the name of the defendant pursuant to underinsured
motorist coverage may not communicate with that individual without the consent
of another attorney employed to represent that individual by her liability
insurer, and the attorney employed by the liability insurer may not take a
position on behalf of the insurer which is adverse to the insured.
RPC 111. An attorney retained by a
liability insurer to defend its insured may not advise insured or insurer
regarding the plaintiff's offer to limit the insured's liability in exchange
for consent to an amendment of the complaint to add a punitive damages
claim.
RPC 112. An attorney retained by an
insurer to defend its insured may not advise insurer or insured regarding the
plaintiff's offer to limit the insured's liability in exchange for an admission
of liability.
RPC 123. An attorney may represent
parents and an independent guardian ad litem for their child concerning related
tort claims under certain circumstances.
RPC 131. An attorney employed to
represent a county in appellate matters may also sue the county's department of
social services if the county and the plaintiffs consent.
RPC 140. There is no disqualifying
conflict of interest where an attorney is retained by an insurer to represent
an insured during the pendency of a declaratory judgment action relating to
coverage in which the attorney is a nonparticipant.
RPC 151. Where an insurance company
and its policyholder are both parties to an action, a lawyer who is a full-time
employee of the insurance company may not represent both the insurance company
and the policyholder because of the "diluted responsibility" to the
policyholder created by the employment relationship between the lawyer and the
insurance company.
RPC 154. An attorney may not
represent the insured, her liability insurer and the same insurer relative to
underinsured motorist coverage carried by the plaintiff.
RPC 160. A lawyer whose associate is
a member of a hospital's board of trustees may not sue the hospital on behalf
of a client. ( But see 2002
FEO 2)
RPC 168. A lawyer may ask her client
for a waiver of objection to a possible future representation presenting a
conflict of interest if certain conditions are met.
RPC 170. A lawyer may jointly
represent a personal injury victim and the medical insurance carrier that holds
a subrogation agreement with the victim provided the victim consents and the
lawyer withdraws upon the development of an actual conflict of interest.
RPC 177. A lawyer may represent the
insured, his liability insurer, and the same insurer relative to underinsured
motorist coverage carried by the plaintiff if the insurer waives its
subrogation rights against the insured and the plaintiff executes a covenant
not to enforce judgment.
RPC 207. A lawyer may represent an
insured in a bad faith action against his insurer for failure to pay a
liability claim brought by a claimant who is represented by the same
lawyer.
RPC 228. A lawyer for a personal
injury victim may not execute an agreement to indemnify the tortfeasor's
liability insurance carrier against the unpaid liens of medical providers.
RPC 229. A lawyer who jointly
represented a husband and wife in the preparation and execution of estate
planning documents may not prepare a codicil to the will of one spouse without
the knowledge of the other spouse if the codicil will affect adversely the
interests of the other spouse or each spouse agreed not to change the estate
plan without informing the other spouse.
RPC 251. A lawyer may represent
multiple claimants in a personal injury case, even though the available
insurance proceeds are insufficient to compensate all claimants fully, provided
each claimant, or his or her legal representative, gives informed consent to
the representation and the lawyer does not advocate against the interest of any
client in the division of the insurance proceeds.
2000
Formal Ethics Opinion 2. Opinion rules that a lawyer
who represented a husband and wife in a joint Chapter 13 bankruptcy case may
continue to represent one of the spouses after the other spouse disappears or
becomes unresponsive, unless the lawyer is aware of any fact or circumstance
that would make the continued representation of the remaining spouse an actual
conflict of interest with the prior representation of the other spouse.
2000
Formal Ethics Opinion 4. Opinion rules that a lawyer
may sign a statement acknowledging a finance company's interest in a client's
recovery subject to certain conditions.
2000
Formal Ethics Opinion 9. Opinion explores the
situations in which a lawyer who is also a CPA may provide legal services and
accounting services from the same office.
2001
Formal Ethics Opinion 6. Opinion examines when a
lawyer has a conflict of interest in representing various family members on
claims for a deceased employee's workers' compensation death benefits.
2002
Formal Ethics Opinion 1. Opinion rules that a lawyer
may participate in a non-profit organization that promotes a cooperative method
for resolving family law disputes although the client is required to make full
disclosure and the lawyer is required to withdraw before court proceedings
commence.
2002
Formal Ethics Opinion 3. Opinion rules that a lawyer
for an estate may seek removal of the personal representative if the personal
representative's breach of fiduciary duties constitutes grounds for removal under
the law.
2002
Formal Ethics Opinion 6. Opinion rules that the
lawyer for the plaintiff may not prepare the answer to a complaint for an
unrepresented adverse party to file pro se.
2003
Formal Ethics Opinion 12. Opinion rules that an
insurance defense lawyer may give the insured and the insurance carrier an
evaluation of a pending case, including settlement prospects, but may not give
an opinion to the carrier on whether to decline to settle within policy limits
and go to trial if the opinion is contrary to the wishes of the insured.
2005
Formal Ethics Opinion 1. Opinion rules that a lawyer
may not appear before a judge who is a family member without consent from all
parties and, although consent is not required, the other members of the firm
must disclose the relationship before appearing before the judge.
2005
Formal Ethics Opinion 7. Opinion rules that an
attorney may recommend that a prospective client use a computer in the
attorneyÕs office and the services of an Internet-based company to complete a
required bankruptcy certification form.
2006
Formal Ethics Opinion 1. A lawyer who represents the
employer and its workers' compensation carrier must share the case evaluation,
litigation plan, and other information with both clients unless the clients
give informed consent to withhold such information.
2006
Formal Ethics Opinion 2. A lawyer may only refer a
client to a financing company if certain conditions are met.
2006
Formal Ethics Opinion 5. The county tax attorney may
not bid at a tax foreclosure sale of real property.
2007
Formal Ethics Opinion 7. Opinion rules that a lawyer
may continue to represent a husband and wife in a Chapter 13 bankruptcy after
they divorce provided the conditions on common representation set forth in Rule
1.7 are satisfied.
2007
Formal Ethics Opinion 10. Opinion holds a lawyer
employed by a school board may serve as an administrative hearing officer with
the informed consent of the board.
2007
Formal Ethics Opinion 11. Opinion rules that a lawyer
is not required to withdraw from representing one client if the other client
revokes consent without good reason and an evaluation of the factors set out in
comment [21] to Rule 1.7 and the Restatement (Third) of the Law Governing
Lawyers indicates continued representation is favored.
2008
Formal Ethics Opinion 2. A lawyer is not prohibited
from advising a school board sitting in an adjudicative capacity in a
disciplinary or employment proceeding while another lawyer from the same firm
represents the administration; however, such dual representation is harmful to
the public's perception of the fairness of the proceeding and should be
avoided.
2008
Formal Ethics Opinion 12. A lawyer may not initiate
foreclosure on a deed of trust on a client's property while still representing
the client.
2009
Formal Ethics Opinion 9. Opinion describes reasonable
procedures for a computer-based conflicts checking system.
2009
Formal Ethics Opinion 11. A lawyer may undertake the
representation of a debtor in a Chapter 13 bankruptcy, although the lender is a
current client, if the lawyer reasonably believes that he will be able to
provide competent and diligent representation to the debtor in the bankruptcy
action while protecting the lenderÕs interests in those matters where the lawyer
represents the lender and both clients give informed consent.
2009
Formal Ethics Opinion 12. A lawyer may prepare an
affidavit and confession of judgment for an unrepresented adverse party
provided the lawyer explains who he represents and
does not give the unrepresented party legal advice; however, the lawyer may not
prepare a waiver of exemptions for the adverse party.
2010
Formal Ethics Opinion 3. A lawyer who currently
represents a police officer in an internal affairs investigation may not
concurrently represent a person charged with a criminal offense if the police
officer is one of the prosecuting witnesses and will be subject to
cross-examination.
2010
Formal Ethics Opinion 12. A hiring law firm may ask an
incoming law school graduate to provide sufficient information as to his prior
legal experience so that the hiring law firm can identify potential conflicts
of interest.
2010
Formal Ethics Opinion 13. A lawyerÕs
self-interest in promoting his own financial services company must not distort
his independent professional judgment in the provision of legal services to the
client including referral of the client to the lawyerÕs own ancillary business.
II. REAL PROPERTY CONFLICTS.
CPR 100. (See also RPC
210 and 97 Formal Ethics Opinion 8.) In the usual residential
loan transaction:
(a) A lawyer may ethically represent both the borrower
and the lender.
(b) If the lawyer intends not to represent both the borrower and the lender, he
must give timely notice to the one he intends not to represent of this fact, so
that the one not represented may secure separate and timely
representation.
(c) If the lawyer does not give such notice, he shall be deemed to represent
both the borrower and the lender.
(d) If the lawyer represents only the borrower, he may nevertheless ethically
provide the title and lien priority assurances required by the lender as a
condition of the loan.
(e) The lawyer shall clearly state to his client(s), whether the borrower or
the lender, or both, whom he represents and the general scope of his
representation.
(f) If the lawyer does not represent both principals, and the one he does not
represent retains another lawyer to represent him, both lawyers should fully
cooperate with each other in serving the interests of their respective clients
and in closing the loan promptly.
(g) If the lawyer represents both the borrower and the lender, he may be
ethically barred from representing either one (without the consent of the
other) if a controversy arises between the borrower and the lender before,
during or after the closing.
It is not unethical for a lawyer representing the borrower and the lender (or
either) in the usual residential loan transaction to prepare a deed from the
seller to the buyer, collect the purchase price for the seller, or draft other
documents (such as a second deed of trust and not secured thereby) as may be
necessary to complete the transaction between the seller and the buyer in
accordance with their agreement, and charge the seller therefor.
It is not unethical for the lawyer representing the borrower, the lender and the
seller (or one or more of them) to provide the title insurer with an opinion on
title sufficient to issue a mortgagee's title insurance policy, the premium for
which is normally paid by the borrower.
CPR 137. An attorney/trustee in a foreclosure proceeding may not represent the
lender when the foreclosure is contested by the borrower.
( But see RPC 82.)
CPR 166. An attorney/trustee cannot
ethically represent either the lender or the borrower in a role of advocacy at
any state of the foreclosure proceeding. In the absence of controversy the
trustee may present, on behalf of the lender, the evidence necessary to support
the clerk's findings essential to a foreclosure order. Even if the proceeding
is adversary, he may ethically perform for himself such legal services as are
necessary to the performance of his fiduciary duties. ( See
also RPC 82.)
CPR 201. When an attorney/trustee
learns that a foreclosure will be contested, he may resign as trustee and
represent the lender. ( See also RPC 82.)
CPR 220. An attorney's secretary may
not be trustee if the attorney wishes to represent the lender at a contested
foreclosure.
CPR 264. After initiating foreclosure, an attorney/trustee may not represent
the lender in defense of the borrower's suit for injunctive relief. ( See also RPC 82.)
CPR 275. An attorney who is part owner of a mortgage brokerage firm may certify
title to real property with respect to which the mortgage broker has arranged
financing.
CPR 297. An attorney/trustee cannot
represent a husband-debtor in a partition action against his wife-debtor, but
he may resign as trustee and then represent the husband. ( See
also RPC 82.)
CPR 305. An attorney/trustee cannot
represent the lender in bankruptcy court in seeking relief from an automatic
stay in order to commence foreclosure. ( See
also RPC 82.)
RPC 3. An attorney/trustee is not
prohibited from continuing to serve as trustee in a contested foreclosure if he
represented the seller at the closing. ( See
also RPC 82.)
RPC 40. For the purposes of a real
estate transaction, an attorney may, with proper notice to the borrower,
represent only the lender, and the lender may prepare the closing documents. ( See also RPC 41.)
RPC 44. A closing attorney must
follow the lender's closing instruction that closing documents be recorded
prior to disbursement.
RPC 46. An attorney acting as
trustee in a foreclosure proceeding may not, while serving in that capacity,
file a motion to have an automatic stay lifted in the debtor's bankruptcy
proceeding. (See also RPC 82.)
RPC 49. Attorneys who own stock in
a real estate company may refer clients to the company if such would be in the
clients' best interest and there is full disclosure, and such attorneys may not
close transactions brokered by the real estate firm.
RPC 64. A lawyer who served as a
trustee may after foreclosure sue the former debtor on behalf of the purchaser.
( See also RPC 82.)
RPC 78. A closing attorney cannot
make conditional delivery of trustee account checks to real estate agent before
depositing loan proceeds against which checks are to be drawn.
RPC 82. This opinion
comprehensively revises the ethical responsibilities of the
attorney-trustee.
RPC 83. The significance of an
attorney's personal interest in property determines whether he or she has a
conflict of interest sufficient to disqualify him or her from rendering a title
opinion concerning that property.
RPC 86. Opinion discusses
disbursement against uncollected funds, accounting for earnest money paid
outside closing and representation of the seller. ( See
also RPC 191.)
RPC 88. A lawyer may close a real
estate transaction brokered by a real estate firm which
employs the attorney's secretary as a part-time real estate broker.
RPC 90. A lawyer who as a trustee
initiated a foreclosure proceeding may resign as trustee after the foreclosure
is contested and act as lender's counsel. ( See
also RPC 82.)
RPC 121. A borrower's lawyer may
render a legal opinion to the lender.
RPC 185. A lawyer who owns any stock
in a title insurance agency may not give title opinions to the title insurance
company for which the title insurance agency issues policies.
RPC 188. A lawyer may close a real
estate transaction brokered by the lawyer's spouse with the consent of the
parties to the transaction.
RPC 201. Opinion explores the
circumstances under which a lawyer who is also a real estate salesperson may
close real estate transactions brokered by the real estate company with which
he is affiliated.
RPC 210. Opinion examines the
circumstances in which it is acceptable for a lawyer to represent the buyer,
seller, and the lender in the closing of a residential real estate transaction.
RPC 248. A lawyer who owns stock in
a mortgage brokerage corporation may not act as the settlement agent for a loan
brokered by the corporation nor may the other lawyers in the firm certify title
or act as settlement agent for the closing.
97
Formal Ethics Opinion 8. Opinion examines the circumstances
in which it is acceptable for the lawyer who regularly represents a real estate
developer to represent the buyer and the developer in the closing of a
residential real estate transaction.
98
Formal Ethics Opinion 10. Opinion rules that an
insurance defense lawyer may not disclose confidential information about an
insured's representation in bills submitted to an independent audit company at
the insurance carrier's request unless the insured consents.
98
Formal Ethics Opinion 11. Opinion rules that the
fiduciary relationship that arises when a lawyer serves as an escrow agent
demands that the lawyer be impartial to both the obligor and the obligee and, therefore, the lawyer may not act as advocate
for either party against the other. Once the fiduciary duties of the escrow
agent terminate, the lawyer may take a position adverse to the obligor or the obligee provided the lawyer is not otherwise disqualified.
99
Formal Ethics Opinion 1. Opinion rules that a lawyer
may not accept a referral fee or solicitor's fee for referring a client to an
investment advisor.
99
Formal Ethics Opinion 8. Opinion rules that a lawyer
may represent all parties in a residential real estate closing and subsequently
represent only one party in an escrow dispute provided the lawyer insures that
the conditions for waiver of an objection to a possible future conflict of
interest set forth in RPC 168 are satisfied.
2004
Formal Ethics Opinion 3. Opinion rules that a
lawyer may represent both the lender and the trustee on a deed of trust in a
dispute with the borrower if the conditions for common representation can be
satisfied.
2004
Formal Ethics Opinion 10. Opinion rules that the
lawyer for the buyer of residential real estate may prepare the deed without
creating a client-lawyer relationship with the seller provided the lawyer makes
specific disclosures to the seller and clarifies her role for the seller.
2006
Formal Ethics Opinion 3. A lawyer who represented the
trustee or served as the trustee in a foreclosure proceeding at which the
lender acquired the subject property may, under some circumstances, represent
all parties on the closing of the sale of the property by the lender provided
the lawyer concludes that his judgment will not be impaired by loyalty to the
lender and there is full disclosure and informed consent.
2007
Formal Ethics Opinion 9. Opinion rules that a closing
lawyer must comply with the conditions placed upon the delivery of a deed by
the seller, including recording the deed and disbursing proceeds, despite
receiving contrary instructions from the buyer.
2008
Formal Ethics Opinion 7. A closing lawyer shall not
record and disburse when a seller has delivered the deed to the lawyer but the
buyer instructs the lawyer to take no further action to close the transaction.
2008
Formal Ethics Opinion 11. A lawyer may serve as the
trustee in a foreclosure proceeding while simultaneously representing the
beneficiary of the deed of trust on unrelated matters and that the other
lawyers in the firm may also continue to represent the beneficiary on unrelated
matters.
2009
Formal Ethics Opinion 8. A lawyer for a party to a
partition proceeding may subsequently serve as a commissioner for the sale but
not as a commissioner for the partitioning of the property.
2009
Formal Ethics Opinion 14. A lawyer participating in a
real estate transaction may not place his clientÕs title insurance with a title
insurance agency in which the lawyerÕs spouse has any ownership interest.
2011
Formal Ethics Opinion 5. A lawyer may not represent
the beneficiary of the deed of trust in a contested foreclosure if the lawyerÕs
spouse and paralegal own an interest in the closely-held
corporate trustee.
CASE NOTES
Conflict of Interest Not Shown - A law firm which represented an insurance
company in securing information to bring the insurance company back into
compliance with North Carolina law and in rehabilitation proceedings
was not prohibited from representing minority shareholders of the company in a
derivative action against the company's directors. Swenson v. Thibaut ,
39 N.C. App. 77, 250 S.E.2d 279 (1978), appeal dismissed , 296
N.C. 740, 254 S.E.2d 181 (1979).
Conflict of Interest Shown. - The attorneys for the
plaintiffs could not represent the receivers of a group of corporations who
were appointed to preserve assets of all the corporations when the plaintiffs
were seeking to have assets transferred from some corporations in the group to
other corporations. Lowder v. All Star
Mills ,
Inc., 60 N.C. App. 275, 300 S.E.2d 230, aff'd
in part, rev'd in part , 309 N.C. 695, 309
S.E.2d 193 (1983).
In a suit against the United States to recover losses resulting from
an airplane crash, representation by the Department of Justice of both
the United States and individual air traffic controllers would create
a conflict of interest and would prevent adequate representation of the
individual controllers. Aetna Cas. &
Sur. Co. v. United States ,
438 F. Supp. 886 (W.D.N.C. 1977),rev'd ,
570 F.2d 1187 (4th Cir.), cert. denied ,
439 U.S. 821, 99 S. Ct. 87, 58 L. Ed. 2d 113 (1978).
Underinsured Motorist Carrier Could Appear as Unnamed Defendant Without
Conflict of Interest. - On a motion by an underinsured motorist carrier to be
allowed to appear in the liability phase of an action against its insured as an
unnamed defendant, the court rejected the contention that an impermissible
conflict of interest would arise if the carrier's attorney were to represent to
the jury that he represented the interests of the tortfeasor. Church v. Allstate Ins. Co., 143 N.C. App. 527, 547
S.E.2d 458 (2001).
Consent Procured Without Advice of Disinterested Counsel. - The consent of an
individual litigant to representation by counsel with a potential conflict of
interest cannot be presumed to be fully informed when it is procured without
the advice of a lawyer who has no conflict of interest. AetnaCas. & Sur. Co. v. United States , 438
F. Supp. 886 (W.D.N.C. 1977), rev'd ,
570 F.2d 1187 (4th Cir.), cert. denied ,
439 U.S. 821, 99 S. Ct. 87, 58 L. Ed. 2d 113 (1978).
Potential Conflict Not Sufficient to Interfere with Right of
Counsel. - A potential conflict of interest, as distinguished from an
actual conflict of interest, is not sufficient to warrant the State's
interference with the constitutionally guaranteed right of a criminal defendant
to retain and be represented by counsel of his choice. State v. Yelton ,
87 N.C. App. 554, 361 S.E.2d 753 (1987).
Although defendant claimed that the joint representation of two accomplices
created a conflict of interest between their attorney and the public's interest
in the fair administration of justice due to what he labeled as the artificial
conformity of the testimony of the accomplices, defendant's interests were not
sufficient to overcome the accomplices' rights to representation by counsel of
their choice where defendant failed to show that the potential conflict of
interest prejudiced his rights. State v. Whiteside , 325 N.C. 389, 383 S.E.2d
911 (1989).
Hearing on Conflict of Interest. - Once a motion by the State or the defense,
or the court on its own motion, raises a possible conflict of interest in a
dual representation situation, the trial court must conduct a hearing. State
v. Yelton , 87 N.C. App. 554, 361 S.E.2d 753 (1987).
Applied in Chappell v. Roth , 141 N.C. App. 502, 539 S.E.2d 666
(2000).
Quoted in Travco Hotels, Inc. v.
Piedmont Natural Gas Co. ,
332 N.C. 288, 420 S.E.2d 426 (1992);State v. Reid , 334 N.C. 551,
434 S.E.2d 193 (1993).
Stated in Furbush v. Otsego Mach.
Shop, Inc ., 914 F. Supp. 1275 (E.D.N.C. 1996).
Cited in Hieb v. Lowery , 121 N.C. App. 33, 464 S.E.2d
308 (1995).
Client-Lawyer Relationship
Rule 1.8
Conflict Of Interest: Current Clients: Specific Rules
(a) A lawyer shall not enter into a business transaction with a
client or knowingly acquire an ownership, possessory, security or other
pecuniary interest directly adverse to a client unless:
(1) the
transaction and terms on which the lawyer acquires the interest are fair and
reasonable to the client and are fully disclosed and transmitted in writing in
a manner that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is
given a reasonable opportunity to seek the advice of independent legal counsel
on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to
the essential terms of the transaction and the lawyer's role in the
transaction, including whether the lawyer is representing the client in the
transaction.
(b) A lawyer shall not use information relating to representation
of a client to the disadvantage of the client unless the client gives informed
consent, except as permitted or required by these Rules.
(c) A lawyer shall not solicit any substantial gift from a client, including a
testamentary gift, or prepare on behalf of a client an instrument giving the
lawyer or a person related to the lawyer any substantial gift unless the lawyer
or other recipient of the gift is related to the client. For purposes of this
paragraph, related persons include a spouse, child, grandchild, parent,
grandparent or other relative or individual with whom the lawyer or the client
maintains a close, familial relationship.
(d) Prior to the conclusion of representation of a client, a lawyer shall not
make or negotiate an agreement giving the lawyer literary or media rights to a
portrayal or account based in substantial part on information relating to the
representation.
(e) A lawyer shall not provide financial assistance to a client in connection
with pending or contemplated litigation, except that:
(1) a
lawyer may advance court costs and expenses of litigation, the repayment of
which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses
of litigation on behalf of the client.
(f) A lawyer shall not accept compensation for representing a
client from one other than the client unless:
(1) the
client gives informed consent;
(2) there is no interference with the lawyer's independence of professional
judgment or with the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required
by Rule 1.6.
(g) A lawyer who represents two or more clients shall not
participate in making an aggregate settlement of the claims of or against the
clients, or in a criminal case an aggregated agreement as to guilty or nolo
contendere pleas, unless each client gives informed consent, in a writing
signed by the client. The lawyer's disclosure shall include the existence and
nature of all the claims or pleas involved and of the participation of each
person in the settlement.
(h) A lawyer shall not:
(1) make
an agreement prospectively limiting the lawyer's liability to a client for
malpractice unless the client is independently represented in making the
agreement; or
(2) settle a claim or potential claim for such liability with an unrepresented
client or former client unless that person is advised in writing of the
desirability of seeking and is given a reasonable opportunity to seek the
advice of independent legal counsel in connection therewith.
(i) A lawyer shall not acquire a
proprietary interest in the cause of action or subject matter of litigation the
lawyer is conducting for a client, except that the lawyer may:
(1) acquire
a lien authorized by law to secure the lawyer's fee or expenses, provided the
requirements of Rule 1.8(a) are satisfied; and
(2) contract with a client for a reasonable contingent fee in a civil case,
except as prohibited by Rule 1.5.
While lawyers are associated in a firm, a prohibition in the
foregoing paragraphs (a) through (i),
that applies to any one of them shall apply to all of them.
Comment
Note: See Rule 1.19 for the prohibition on client-lawyer
sexual relationships.
Business Transactions Between Client and Lawyer
[1] A lawyer's legal skill and training, together
with the relationship of trust and confidence between lawyer and client, create
the possibility of overreaching when the lawyer participates in a business,
property or financial transaction with a client, for example, a loan or sales
transaction or a lawyer investment on behalf of a client. The requirements of
paragraph (a) must be met even when the transaction is not closely related to
the subject matter of the representation, as when a lawyer drafting a will for
a client learns that the client needs money for unrelated expenses and offers
to make a loan to the client. See Rule 5.7. It also applies to
lawyers purchasing property from estates they represent. It does not apply to ordinary
fee arrangements between client and lawyer, which are governed by Rule 1.5,
although its requirements must be met when the lawyer accepts an interest in
the client's business or other nonmonetary property as payment of all or part
of a fee. In addition, the Rule does not apply to standard commercial
transactions between the lawyer and the client for products or services that
the client generally markets to others, for example, banking or brokerage
services, medical services, products manufactured or distributed by the client,
and utilities' services. In such transactions, the lawyer has no advantage in
dealing with the client, and the restrictions in paragraph (a) are unnecessary
and impracticable.
[2] Paragraph (a)(1) requires that the transaction itself be fair to the client
and that its essential terms be communicated to the client, in writing, in a
manner that can be reasonably understood. Paragraph (a)(2) requires that the
client also be advised, in writing, of the desirability of seeking the advice
of independent legal counsel. It also requires that the client be given a
reasonable opportunity to obtain such advice. Paragraph (a)(3) requires that
the lawyer obtain the client's informed consent, in a writing signed by the
client, both to the essential terms of the transaction and to the lawyer's
role. When necessary, the lawyer should discuss both the material risks of the
proposed transaction, including any risk presented by the lawyer's involvement,
and the existence of reasonably available alternatives and should explain why
the advice of independent legal counsel is desirable. See Rule
1.0(f) (definition of informed consent).
[3] The risk to a client is greatest when the client expects the lawyer to
represent the client in the transaction itself or when the lawyer's financial
interest otherwise poses a significant risk that the lawyer's representation of
the client will be materially limited by the lawyer's financial interest in the
transaction. Here the lawyer's role requires that the lawyer must comply, not
only with the requirements of paragraph (a), but also with the requirements of
Rule 1.7. Under that Rule, the lawyer must disclose the risks associated with
the lawyer's dual role as both legal adviser and participant in the
transaction, such as the risk that the lawyer will structure the transaction or
give legal advice in a way that favors the lawyer's interests at the expense of
the client. Moreover, the lawyer must obtain the client's informed consent. In
some cases, the lawyer's interest may be such that Rule 1.7 will preclude the
lawyer from seeking the client's consent to the transaction.
[4] If the client is independently represented in the transaction, paragraph
(a)(2) of this Rule is inapplicable, and the paragraph (a)(1) requirement for
full disclosure is satisfied either by a written disclosure by the lawyer
involved in the transaction or by the client's independent counsel. The fact
that the client was independently represented in the transaction is relevant in
determining whether the agreement was fair and reasonable to the client as paragraph (a)(1) further requires.
Use of Information Related to Representation
[5] Use of information relating to the representation to the disadvantage
of the client violates the lawyer's duty of loyalty. Paragraph (b) applies when
the information is used to benefit either the lawyer or a third person, such as
another client or business associate of the lawyer. For example, if a lawyer
learns that a client intends to purchase and develop several parcels of land,
the lawyer may not use that information to purchase one of the parcels in
competition with the client or to recommend that another client make such a
purchase. The Rule does not prohibit uses that do not disadvantage the client.
For example, a lawyer who learns a government agency's interpretation of trade
legislation during the representation of one client may properly use that
information to benefit other clients. Paragraph (b) prohibits disadvantageous
use of client information unless the client gives informed consent, except as
permitted or required by these Rules. See Rules 1.2(d), 1.6,
1.9(c), 3.3, 4.1, 8.1 and 8.3.
Gifts to Lawyers
[6] A lawyer may accept a gift from a client, if the transaction meets
general standards of fairness. For example, a simple gift such as a present
given at a holiday or as a token of appreciation is permitted. If a client
offers the lawyer a more substantial gift, paragraph (c) does not prohibit the
lawyer from accepting it, although such a gift may be voidable by the client
under the doctrine of undue influence, which treats client gifts as
presumptively fraudulent. In any event, due to concerns about overreaching and
imposition on clients, a lawyer may not suggest that a substantial gift be made
to the lawyer or for the lawyer's benefit, except where the lawyer is related
to the client as set forth in paragraph (c).
[7] If effectuation of a substantial gift requires preparing a legal instrument
such as a will or conveyance, the client should have the detached advice that
another lawyer can provide. The sole exception to this Rule is where the client
is a relative of the donee.
[8] This Rule does not prohibit a lawyer from seeking to have the lawyer or a
partner or associate of the lawyer named as executor of the client's estate or
to another potentially lucrative fiduciary position. Nevertheless, such
appointments will be subject to the general conflict of interest provision in
Rule 1.7 when there is a significant risk that the lawyer's interest in obtaining
the appointment will materially limit the lawyer's independent professional
judgment in advising the client concerning the choice of an executor or other
fiduciary. In obtaining the client's informed consent to the conflict, the
lawyer should advise the client concerning the nature and extent of the
lawyer's financial interest in the appointment, as well as the availability of
alternative candidates for the position.
Literary Rights
[9] An agreement by which a lawyer acquires
literary or media rights concerning the conduct of the representation creates a
conflict between the interests of the client and the personal interests of the
lawyer. Measures suitable in the representation of the client may detract from
the publication value of an account of the representation. Paragraph (d) does
not prohibit a lawyer representing a client in a transaction concerning
literary property from agreeing that the lawyer's fee shall consist of a share
in ownership in the property, if the arrangement conforms to Rule 1.5 and
paragraphs (a) and (i).
Financial Assistance
[10] Lawyers may not subsidize lawsuits or administrative proceedings
brought on behalf of their clients, including making or guaranteeing loans to
their clients for living expenses, because to do so would encourage clients to
pursue lawsuits that might not otherwise be brought and because such assistance
gives lawyers too great a financial stake in the litigation. These dangers do
not warrant a prohibition on a lawyer lending a client court costs and litigation
expenses, including the expenses of medical examination and the costs of
obtaining and presenting evidence, because these advances are virtually
indistinguishable from contingent fees and help ensure access to the courts.
Similarly, an exception allowing lawyers representing indigent clients to pay
court costs and litigation expenses regardless of whether these funds will be
repaid is warranted.
Person Paying for a Lawyer's Services
[11] Lawyers are frequently asked to represent a client under circumstances in
which a third person will compensate the lawyer, in whole or in part. The third
person might be a relative or friend, an indemnitor
(such as a liability insurance company) or a co-client (such as a corporation
sued along with one or more of its employees). Because third-party payers
frequently have interests that differ from those of the client, including
interests in minimizing the amount spent on the representation and in learning
how the representation is progressing, lawyers are prohibited from accepting or
continuing such representations unless the lawyer determines that there will be
no interference with the lawyer's independent professional judgment and there
is informed consent from the client. See also Rule 5.4(c)
(prohibiting interference with a lawyer's professional judgment by one who
recommends, employs or pays the lawyer to render legal services for another).
[12] Sometimes, it will be sufficient for the lawyer to obtain the client's
informed consent regarding the fact of the payment and the identity of the
third-party payer. If, however, the fee arrangement creates a conflict of
interest for the lawyer, then the lawyer must comply with Rule. 1.7. The lawyer must also conform to the requirements of Rule 1.6
concerning confidentiality. Under Rule 1.7(a), a conflict of interest exists if
there is significant risk that the lawyer's representation of the client will
be materially limited by the lawyer's own interest in the fee arrangement or by
the lawyer's responsibilities to the third-party payer (for example, when the
third-party payer is a co-client). Under Rule 1.7(b), the lawyer may accept or
continue the representation with the informed consent of each affected client,
unless the conflict is nonconsentable under that
paragraph. Under Rule 1.7(b), the informed consent must be confirmed in
writing.
Aggregate Settlements
[13] Differences in willingness to make or accept an offer of settlement
are among the risks of common representation of multiple clients by a single
lawyer. Under Rule 1.7, this is one of the risks that should be discussed
before undertaking the representation, as part of the process of obtaining the
clients' informed consent. In addition, Rule 1.2(a) protects each client's
right to have the final say in deciding whether to accept or reject an offer of
settlement and in deciding whether to enter a guilty or nolo contendere plea in
a criminal case. The rule stated in this paragraph is a corollary of both these
Rules and provides that, before any settlement offer or plea bargain is made or
accepted on behalf of multiple clients, the lawyer must inform each of them
about all the material terms of the settlement, including what the other
clients will receive or pay if the settlement or plea offer is accepted. See
also Rule 1.0(f) (definition of informed consent). Lawyers
representing a class of plaintiffs or defendants, or those proceeding
derivatively, may not have a full client-lawyer relationship with each member
of the class; nevertheless, such lawyers must comply with applicable rules
regulating notification of class members and other procedural requirements
designed to ensure adequate protection of the entire class.
Limiting Liability and Settling Malpractice Claims
[14] Agreements prospectively limiting a lawyer's liability for malpractice
are prohibited unless the client is independently represented in making the
agreement because they are likely to undermine competent and diligent
representation. Also, many clients are unable to evaluate the desirability of
making such an agreement before a dispute has arisen, particularly if they are then represented by the lawyer seeking the agreement.
This paragraph does not, however, prohibit a lawyer from entering into an
agreement with the client to arbitrate legal malpractice claims, provided such
agreements are enforceable and the client is fully informed of the scope and
effect of the agreement. Nor does this paragraph limit the ability of lawyers
to practice in the form of a limited-liability entity, where permitted by law, provided
that each lawyer remains personally liable to the client for his or her own
conduct and the firm complies with any conditions required by law, such as
provisions requiring client notification or maintenance of adequate liability
insurance. Nor does it prohibit an agreement in accordance with Rule 1.2 that
defines the scope of the representation, although a definition of scope that
makes the obligations of representation illusory will amount to an attempt to
limit liability.
[15] Agreements settling a claim or a potential claim for malpractice are not
prohibited by this Rule. Nevertheless, in view of the danger that a lawyer will
take unfair advantage of an unrepresented client or former client, the lawyer
must first advise such a person in writing of the appropriateness of
independent representation in connection with such a settlement. In addition,
the lawyer must give the client or former client a reasonable opportunity to
find and consult independent counsel.
Acquiring Proprietary Interest in Litigation
[16] Paragraph (i) states the traditional general
rule that lawyers are prohibited from acquiring a proprietary interest in
litigation. Like paragraph (e), the general rule has its basis in common law champerty and maintenance and is designed to avoid giving
the lawyer too great an interest in the representation. In addition, when the
lawyer acquires an ownership interest in the subject of the representation, it
will be more difficult for a client to discharge the lawyer if the client so
desires. The Rule permits a lawyer to acquire a lien to secure the lawyer's fee
or expenses provided the requirements of Rule 1.7 are satisfied. Specifically,
the lawyer must reasonably believe that the representation will not be
adversely affected after taking into account the possibility that the
acquisition of a proprietary interest in the client's cause of action or any
res involved therein may cloud the lawyer's judgment and impair the lawyer's
ability to function as an advocate. The lawyer must also disclose the risks
involved prior to obtaining the client's consent. Prior to initiating a
foreclosure on property subject to a lien securing a legal fee, the lawyer must
notify the client of the right to require the lawyer to participate in the
mandatory fee dispute resolution program. See Rule
1.5(f).
[17] The Rule is subject to specific exceptions developed in decisional law and
continued in these Rules. The exception for certain advances of the costs of
litigation is set forth in paragraph (e). In addition, paragraph (i) sets forth exceptions for liens authorized by law to
secure the lawyer's fees or expenses and contracts for reasonable contingent
fees. The law of each jurisdiction determines which liens are
authorized by law. These may include liens granted by statute, liens
originating in common law and liens acquired by contract with the client. When
a lawyer acquires by contract a security interest in property other than that
recovered through the lawyer's efforts in the litigation, such an acquisition
is a business or financial transaction with a client and is governed by the
requirements of paragraph (a). Contracts for contingent fees
in civil cases are governed by Rule 1.5.
Imputation of Prohibitions
[18] Under paragraph (j), a prohibition on conduct by an individual lawyer
in paragraphs (a) through (i) also applies to all
lawyers associated in a firm with the personally prohibited lawyer. For
example, one lawyer in a firm may not enter into a business transaction with a
client of another member of the firm without complying with paragraph (a), even
if the first lawyer is not personally involved in the representation of the
client.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 11. An attorney may contract to receive an interest in real property
as a contingent fee for legal representation in an action to clear title to the
subject property.
CPR 135. It is not improper for a legal aid society to request clients to
donate unused trust funds to the society.
CPR 157. An attorney handling a personal injury case may advance the cost of
the client's medical examination if such is actually an expense of litigation
for which the client remains ultimately liable. ( But
see Rule 1.8(e))
CPR 241. An attorney may practice
law and sell insurance but must keep the law practice and the insurance
business separate in all respects. The attorney should not sell insurance to
clients for whom he has provided legal services involving estate
planning.
CPR 291. An attorney who has procured a judgment for a client that has not been
collected by the ninth year may purchase the judgment if the client does wish
to renew it, but this practice is not encouraged.
CPR 346. An attorney may represent a defendant employee of a city and accept
payment of his fee from the city even though the employee may cross-claim
against city.
CPR 364. An attorney may not purchase a judgment even though the client needs
money immediately.
RPC 11. Full disclosure and
clients' consent are necessary only when married lawyers personally participate
as counsel.
RPC 24. An attorney may not
purchase his client's property at an execution sale on his own account.
RPC 76. A lawyer may advance his client's
fine.
RPC 80. A lawyer may not lend money
to a client who is represented in pending or contemplated litigation except to
finance costs of litigation.
RPC 84. An attorney may not
condition settlement of a civil dispute on an agreement not to report lawyer
misconduct.
RPC 124. An attorney may not agree
to bear the costs of federal class action litigation. But see In re
S.E. Hotel Properties Ltd. Partnership , 151 F.R.D. 597 (W.D.N.C. 1993).
RPC 134. An attorney may not accept
an assignment of her client's judgment while representing the client on appeal
of the judgment.
RPC 167. A lawyer may accept
compensation from a potentially adverse insurance carrier for representing a
minor in the court approval of a personal injury settlement provided the lawyer
is able to represent the minor's interests without regard to who is actually
paying for his services.
RPC 173. A lawyer who represents a
client on a criminal charge may not lend the client the money necessary to post
bond.
RPC 186. A lawyer who represents a
client in a pending domestic action may take a promissory note secured by a
deed of trust as payment for the lawyer's fee even though the deed of trust is
on real property that is or may be the subject of the domestic action.
RPC 187. A lawyer may not ask a
client for authorization to instruct the clerk of court to forward the client's
support payments to the lawyer in order to satisfy the client's legal
fees.
RPC 238. A lawyer is subject to the
Rules of Professional Conduct with respect to the provision of a law-related
service, such as financial planning, if the law related service is provided in
circumstances that are not distinct from the lawyer's provision of legal
services to clients.
98
Formal Ethics Opinion 14. Opinion rules that a lawyer
may participate in the solicitation of funds from third parties to pay the
legal fees of a client provided there is disclosure to contributors and the
funds are administered honestly.
98
Formal Ethics Opinion 17. Opinion rules that a lawyer
may not comply with an insurance carrier's billing requirements and guidelines
if they interfere with the lawyer's ability to exercise his or her independent
professional judgment in the representation of the insured.
2001
Formal Ethics Opinion 7. Opinion prohibits a lawyer
from advancing the cost of a rental car to a client even though the car will be
used, on occasion, to transport the client to medical examinations.
2001
Formal Ethics Opinion 9. Opinion rules that, although
a lawyer may recommend the purchase a financial product to a legal client, the
lawyer may not receive a commission for its sale.
2003
Formal Ethics Opinion 7. A lawyer may not prepare a
power of attorney for the benefit of the principal at the request of another
individual or third-party payer without consulting
with, exercising independent professional judgment on behalf of, and obtaining
consent from the principal.
2005
Formal Ethics Opinion 12. Opinion explores a
lawyerÕs obligation to return legal fees when a third party is the payor.
2006
Formal Ethics Opinion 11. Outside of the commercial or
business context, a lawyer may not, at the request of a third party, prepare
documents, such as a will or trust instrument, that purport to speak solely for
principal without consulting with, exercising independent professional judgment
on behalf of, and obtaining consent from the principal.
2006
Formal Ethics Opinion 12. Opinion explores the
circumstances under which a lawyer may obtain litigation funding from a
financing company.
2008
Formal Ethics Opinion 12. A lawyer may not initiate
foreclosure on a deed of trust on a client's property while still representing
the client.
2010
Formal Ethics Opinion 13. A lawyer may receive a fee
or commission in exchange for providing financial services and products to a
legal client so long as the lawyer complies with the ethical rules pertaining
to the provision of law-related services, business transactions with clients,
and conflicts of interest.
CASE NOTES
A fee arrangement whereby a law firm would receive a one-third interest in the
shares it was representing in a derivative action by minority shareholders of a
corporation against the directors of the corporation did not constitute an
acquisition by the law firm of an improper interest in the subject matter of
the litigation. Swenson v. Thibaut, 39
N.C. App. 77, 250 S.E.2d 279 (1978),appeal
dismissed , 296 N.C. 740, 254 S.E.2d 181 (1979).
Release Exonerating Attorney. - The attorney violated the Code of Professional
Responsibility by having his client sign a release in an attempt to exonerate himself from malpractice. North Carolina State Bar
v. Frazier, 62 N.C. App. 172, 302 S.E.2d 648, appeal dismissed ,
308 N.C. 677, 303 S.E.2d 546 (1983).
Obligation to Pay Expert. - When a lawyer hiring an
expert to help on a case says or does nothing to indicate that the obligation
to pay is not his, the expert can reasonably assume that the lawyer is the
contracting party, rather than the client. Gualtieri
v. Burleson ,
84 N.C. App. 650, 353 S.E.2d 652, disc. rev.
denied , 320 N.C. 168, 358 S.E.2d 50 (1987).
Lending Money to Clients. - The State Bar's hearing committee's finding adequately
supported its conclusion that the defendant violated Rules of Professional
Responsibility 5.3(B) and 1.2(A) where the undisputed facts were that: (1) the
defendant kept $ 20,000.00 in his trust account for several years which came
from his brother's company, and (2) he loaned this money to three clients to
pay for one client's surgery; another client's rent and payments on a car note;
and a third client's surgical, medical and travel expenses. North
Carolina State Bar v. Harris ,
137 N.C. App. 207, 527 S.E.2d 728 (2000).
Liability for Costs of Class Action. - Where class
representative plaintiffs agreed with their counsel that counsel - rather than
the class members or class representatives - would bear ultimate liability for
the costs and expenses of litigation the arrangement was ethical and in no way
impacted upon the adequacy of counsel under Federal Rules of Civil Procedure
Rule 23(a)(4). In re S.E. Hotel Properties Ltd. Partnership , 151 F.R.D. 597 (W.D.N.C.
1993).
Client-Lawyer Relationship
Rule 1.9
Duties to Former Clients
(a) A lawyer who has formerly represented a client in a matter
shall not thereafter represent another person in the same or a substantially
related matter in which that person's interests are materially adverse to the
interests of the former client unless the former client gives informed consent,
confirmed in writing.
(b) A lawyer shall not knowingly represent a person in the same or a
substantially related matter in which a firm with which the lawyer formerly was
associated had previously represented a client
(1) whose
interests are materially adverse to that person; and
(2) about whom the lawyer had acquired information protected by Rules 1.6 and
1.9(c) that is material to the matter; unless the former client gives informed
consent, confirmed in writing.
(c) A lawyer who has formerly represented a client in a matter or
whose present or former firm has formerly represented a client in a matter
shall not thereafter:
(1) use
information relating to the representation to the disadvantage of the former
client except as these Rules would permit or require with respect to a client,
or when the information has become generally known; or
(2) reveal information relating to the representation except as these Rules
would permit or require with respect to a client.
Comment
[1] After termination of a client-lawyer relationship, a lawyer has certain
continuing duties with respect to confidentiality and conflicts of interest and
thus may not represent another client except in conformity with this Rule.
Under this Rule, for example, a lawyer could not properly seek to rescind on
behalf of a new client a contract drafted on behalf of the former client. So
also a lawyer who has prosecuted an accused person could not properly represent
the accused in a subsequent civil action against the government concerning the
same transaction. Nor could a lawyer who has represented multiple clients in a
matter represent one or more of the clients in the same or a substantially
related matter after a dispute arose among the clients in that matter, unless
all affected clients give informed consent or the continued representation of
the client(s) is not materially adverse to the interests of the former
clients. See Comment [9]. Current and former government
lawyers must comply with this Rule to the extent required by Rule 1.11.
[2] The scope of a "matter" for purposes of this Rule depends on the
facts of a particular situation or transaction. The lawyer's involvement in a matter
can also be a question of degree. When a lawyer has been directly involved in a
specific transaction, subsequent representation of other clients with
materially adverse interests in that transaction clearly is prohibited. The
underlying question is whether the lawyer was so involved in the matter that
the subsequent representation can be justly regarded as a changing of sides in
the matter in question.
[3] Matters are "substantially related" for purposes of this Rule if
they involve the same transaction or legal dispute or if there otherwise is a
substantial risk that information as would normally have been obtained in the
prior representation would materially advance the client's position in the
subsequent matter. For example, a lawyer who has represented a businessperson
and learned extensive private financial information about that person may not
then represent that person's spouse in seeking a divorce. Similarly, a lawyer
who has previously represented a client in securing environmental permits to
build a shopping center would be precluded from representing neighbors seeking
to oppose rezoning of the property on the basis of environmental
considerations; however, the lawyer would not be precluded, on the grounds of
substantial relationship, from defending a tenant of the completed shopping
center in resisting eviction for nonpayment of rent. Information that has been
disclosed to the public or to other parties adverse to the former client
ordinarily will not be disqualifying. Information acquired in a prior
representation may have been rendered obsolete by the passage of time, a
circumstance that may be relevant in determining whether two representations
are substantially related. In the case of an organizational client, general
knowledge of the client's policies and practices ordinarily will not preclude a
subsequent representation; on the other hand, knowledge of specific facts
gained in a prior representation that are relevant to the matter in question
ordinarily will preclude such a representation. A former client is not required
to reveal the information learned by the lawyer to establish a substantial risk
that the lawyer has information to use in the subsequent matter. A conclusion
about the possession of such information may be based on the nature of the
services the lawyer provided the former client and information that would in
ordinary practice be learned by a lawyer providing such services.
Lawyers Moving Between Firms
[4] When lawyers have been associated within a firm but then end their association,
the question of whether a lawyer should undertake representation is more
complicated. There are several competing considerations. First, the client
previously represented by the former firm must be reasonably assured that the
principle of loyalty to the client is not compromised. Second, the rule should
not be so broadly cast as to preclude other persons from having reasonable
choice of legal counsel. Third, the rule should not unreasonably hamper lawyers
from forming new associations and taking on new clients after having left a
previous association. In this connection, it should be recognized that today
many lawyers practice in firms, that many lawyers to some degree limit their
practice to one field or another, and that many move from one association to
another several times in their careers. If the concept of imputation were
applied with unqualified rigor, the result would be radical curtailment of the
opportunity of lawyers to move from one practice setting to another and of the
opportunity of clients to change counsel.
[5] Paragraph (b) operates to disqualify the lawyer only when the lawyer
involved has actual knowledge of information protected by Rules 1.6 and 1.9(c).
Thus, if a lawyer while with one firm acquired no knowledge or information
relating to a particular client of the firm, and that lawyer later joined
another firm, neither the lawyer individually nor the second firm is
disqualified from representing another client in the same or a related matter
even though the interests of the two clients conflict. See Rule
1.10(b) for the restrictions on a firm once a lawyer has terminated association
with the firm.
[6] Application of paragraph (b) depends on a situation's particular facts,
aided by inferences, deductions or working presumptions that reasonably may be
made about the way in which lawyers work together. A lawyer may have general
access to files of all clients of a law firm and may regularly participate in
discussions of their affairs; it should be inferred that such a lawyer in fact
is privy to all information about all the firm's clients. In contrast, another
lawyer may have access to the files of only a limited number of clients and
participate in discussions of the affairs of no other clients; in the absence
of information to the contrary, it should be inferred that such a lawyer in
fact is privy to information about the clients actually served but not those of
other clients. In such an inquiry, the burden of proof should rest upon the
firm whose disqualification is sought.
[7] Independent of the question of disqualification of a firm, a lawyer
changing professional association has a continuing duty to preserve
confidentiality of information about a client formerly represented. See Rules
1.6 and 1.9(c).
[8] Paragraph (c) provides that information acquired by the lawyer in the
course of representing a client may not subsequently be used or revealed by the
lawyer to the disadvantage of the client. However, the fact that a lawyer has
once served a client does not preclude the lawyer from using generally known
information about that client when later representing another client. Whether
information is "generally known" depends in part upon how the
information was obtained and in part upon the former client's reasonable expectations.
The mere fact that information is accessible through the public record or has
become known to some other persons, does not
necessarily deprive the information of its confidential nature. If the
information is known or readily available to a relevant sector of the public,
such as the parties involved in the matter, then the information is probably
considered "generally known." See Restatement
(Third) of The Law of Governing Lawyers, 111 cmt.
d.
[9] The provisions of this Rule are for the protection of former clients and
can be waived if the client gives informed consent, which consent must be
confirmed in writing under paragraphs (a) and (b). See Rule
1.0(f). With regard to the effectiveness of an advance waiver, see Comment [22]
to Rule 1.7. With regard to disqualification of a firm with which a lawyer is
or was formerly associated, see Rule 1.10.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 140. It is improper for an attorney who formerly represented a
creditor to later represent the debtor in the same action.
CPR 147. An attorney cannot defend an action brought by a former client when
confidential information obtained during the prior representation would be
relevant to the defense of the current action.
CPR 159. It is proper for an attorney to prepare a will for a woman and later
represent her husband in a domestic action so long as the prior representation
is not substantially related to the present action.
CPR 195. An attorney may not act as a private prosecutor against a former
client who sought his advice concerning the domestic problems
which culminated in the subject homicide.
CPR 243. An attorney may certify title to the State for purposes of
condemnation and later represent the landowner against the State in a suit for
damages if all consent.
CPR 273. An attorney may not represent a neighborhood group in opposition to
another group he previously represented concerning the same or substantially
related subject matter.
RPC 32. An attorney who represented
a husband and wife in certain matters may not later represent the husband in an
action for alimony and equitable distribution.
RPC 137. An attorney who formerly
represented an estate may not subsequently defend the former personal
representative against a claim brought by the estate.
RPC 144. A lawyer having undertaken
to represent two clients in the same matter may not thereafter represent one
against the other in the event their interests become adverse without the
consent of the other.
RPC 168. A lawyer may ask her client
for a waiver of objection to a possible future representation presenting a
conflict of interest if certain conditions are met.
RPC 229. A lawyer who jointly
represented a husband and wife in the preparation and execution of estate
planning documents may not prepare a codicil to the will of one spouse without
the knowledge of the other spouse if the codicil will affect adversely the
interests of the other spouse or each spouse agreed not to change the estate
plan without informing the other spouse.
RPC 244. Although a lawyer asks a
prospective client to sign a form stating that no client-lawyer relationship
will be created by reason of a free consultation with the lawyer, the lawyer
may not subsequently disclaim the creation of a client-lawyer relationship and
represent the opposing party.
RPC 246. Under certain
circumstances, a lawyer may not represent a party whose interests are opposed
to the interests of a prospective client if confidential information of the
prospective client must be used in the representation.
2000
Formal Ethics Opinion 2. Opinion rules that a lawyer
who represented a husband and wife in a joint Chapter 13 bankruptcy case may
continue to represent one of the spouses after the other spouse disappears or
becomes unresponsive, unless the lawyer is aware of any fact or circumstance
that would make the continued representation of the remaining spouse an actual
conflict of interest with the prior representation of the other spouse.
2003
Formal Ethics Opinion 9. A lawyer may participate in
a settlement agreement that contains a provision limiting or prohibiting
disclosure of information obtained during the representation even though the
provision will effectively limit the lawyer's ability to represent future
claimants.
2003 Formal Ethics Opinion 14. Opinion rules that
if a current representation requires cross-examination of a former client using
confidential information gained in the prior representation, then a lawyer has
a disqualifying conflict of interest.
2009
Formal Ethics Opinion 8. A lawyer for a party to a
partition proceeding may subsequently serve as a commissioner for the sale but
not as one of the commissioners for the partitioning of the property.
2010
Formal Ethics Opinion 3. If a Lawyer who formerly
represented a police officer determines that he does not need to use any
confidential information that is not generally known to effectively
cross-examine the officer in a prospective clientÕs criminal matter, the lawyer
must still disclose the former lawyer-client relationship so that the
prospective client can make an informed decision about the lawyerÕs
representation.
2011
Formal Ethics Opinion 2. Factors to be taken into
consideration when determining whether a former clientÕs delay in objecting to
a conflict constitutes a waiver.
CASE NOTES
Conflict of Interest Not Shown. - There was no conflict of interest involved
where the attorney for the plaintiff in an action to impress a trust had
represented a defendant in a divorce action against her former husband, her
co-defendant in this action. In this case the former client had consented to
the attorney's representation of the current client, her foster mother, who
knew of the prior representation. Saintsing
v. Taylor, 57 N.C. App. 467, 291 S.E.2d 880, cert. denied , 306
N.C. 558, 294 S.E.2d 224 (1982).
Refusal to Disqualify Counsel. - In a derivative
action in which the defendant waited 22 months before moving to disqualify the
plaintiffs' counsel on the ground of prior representation of the defendant by
the attorney who referred the derivative action to the plaintiffs' counsel, the
trial court did not abuse its discretion in refusing to disqualify
counsel. Lowder v. All Star Mills Inc .,
60 N.C. App. 275, 300 S.E.2d 230, aff'd
in part, rev'd in part , 309 N.C. 695, 309 S.E.2d
193 (1983).
Law firm was disqualified from representing plaintiff computer company in
copyright case against another company which hired three of plaintiff's
engineers where the law firm had previously represented one of the
engineers. Robert Woodhead, Inc. v. Datawatch Corp ., 934 F. Supp. 181 (E.D.N.C. 1995).
Client-Lawyer Relationship
Rule 1.10
Imputation of Conflicts of Interest: General Rule
(a)
While lawyers are associated in a firm, none of them shall knowingly represent
a client when any one of them practicing alone would be prohibited from doing
so by Rules 1.7 or 1.9, unless the prohibition is based on a personal interest
of the prohibited lawyer, including a prohibition under Rule 6.6, and the
prohibition does not present a significant risk of materially limiting the
representation of the client by the remaining lawyers in the firm.
(b)
When a lawyer has terminated an association with a firm, the firm is not
prohibited from thereafter representing a person with interests materially
adverse to those of a client represented by the formerly associated lawyer and
not currently represented by the firm, unless:
(1)
the matter is the same or substantially related to
that in which the formerly associated lawyer represented the client; and
(2)
any lawyer remaining in the firm has information
protected by Rules 1.6 and 1.9(c) that is material to the matter.
(c)
When a lawyer becomes associated with a firm, no lawyer associated in the firm
shall knowingly represent a person in a matter in which that lawyer is
disqualified under Rule 1.9 unless:
(1)
the personally disqualified lawyer is timely screened
from any participation in the matter; and
(2)
written notice is promptly given to any affected
former client to enable it to ascertain compliance with the provisions of this
Rule.
(d) A disqualification prescribed by this rule may be waived by
the affected client under the conditions stated in Rule 1.7.
(e) The disqualification of lawyers associated in a firm with former
or current government lawyers is governed by Rule 1.11.
Comment
Definition
of "Firm"
[1]
For purposes of the Rules of Professional Conduct, the term "firm"
denotes lawyers in a law partnership, professional corporation, sole
proprietorship or other association authorized to practice law; or lawyers
employed in a legal services organization or the legal department of a
corporation or other organization. See Rule 1.0(d). Whether two or more lawyers
constitute a firm within this definition can depend on the specific facts. See
Rule 1.0, Comments [2] - [4].
Principles
of Imputed Disqualification
[2]
The rule of imputed disqualification stated in paragraph (a) gives effect to
the principle of loyalty to the client as it applies to lawyers who practice in
a law firm. Such situations can be considered from the premise that a firm of
lawyers is essentially one lawyer for purposes of the rules governing loyalty
to the client, or from the premise that each lawyer is vicariously bound by the
obligation of loyalty owed by each lawyer with whom the lawyer is associated.
Paragraph (a) operates only among the lawyers currently associated in a firm.
When a lawyer moves from one firm to another, the situation
is governed by Rules 1.9(b) and 1.10(b).
[3]
The rule in paragraph (a) does not prohibit representation where neither
questions of client loyalty nor protection of confidential information are
presented. Where one lawyer in a firm could not effectively represent a given
client because of strong political beliefs, for example, but that lawyer will
do no work on the case and the personal beliefs of the lawyer will not
materially limit the representation by others in the firm, the firm should not
be disqualified. On the other hand, if an opposing party in a
case were owned by a lawyer in the law firm, and others in the firm
would be materially limited in pursuing the matter because of loyalty to that
lawyer, the personal disqualification of the lawyer would be imputed to all
others in the firm.
[4] The rule in paragraph (a) also does not prohibit
representation by others in the law firm where the person prohibited from
involvement in a matter is a nonlawyer, such as a
paralegal or legal secretary. Nor does paragraph (a) prohibit representation if
the lawyer is prohibited from acting because of events before the person became
a lawyer, for example, work that the person did while a law student. Such
persons, however, ordinarily must be screened from any personal participation
in the matter to avoid communication to others in the firm of confidential
information that both the nonlawyers and the firm
have a legal duty to protect. See
Rules 1.0(l) and 5.3.
[5]
Rule 1.10(b) operates to permit a law firm, under certain circumstances, to
represent a person with interests directly adverse to those of a client
represented by a lawyer who formerly was associated with the firm. The Rule
applies regardless of when the formerly associated lawyer represented the
client. However, the law firm may not represent a person with interests adverse
to those of a present client of the firm, which would violate Rule 1.7.
Moreover, the firm may not represent the person where the matter is the same or
substantially related to that in which the formerly associated lawyer
represented the client and any other lawyer currently in the firm has material
information protected by Rules 1.6 and 1.9(c).
[6]
Where the conditions of paragraph (c) are met, imputation is removed, and
consent to the new representation is not required. Lawyers should be aware, however,
that courts may impose more stringent obligations in
ruling upon motions to disqualify a lawyer from pending litigation.
[7]
Requirements for screening procedures are stated in Rule 1.0(l). Paragraph
(c)(2) does not prohibit the screened lawyer from receiving a salary or
partnership share established by prior independent agreement, nor does it
specifically prohibit the receipt of a part of the fee from the screened
matter. However, Rule 8.4(c) prohibits the screened lawyer from participating
in the fee if such participation was impliedly or explicitly offered as an
inducement to the lawyer to become associated with the firm.
[8]
Notice, including a description of the screened lawyer's prior representation
and of the screening procedures employed, generally should be given as soon as
practicable after the need for screening becomes apparent.
[9]
Rule 1.10(d) removes imputation with the informed consent of the affected
client under the conditions stated in Rule 1.7. The conditions stated in Rule
1.7 require the lawyer to determine that the representation
is not prohibited by Rule 1.7(b) and that each affected client has given
informed consent to the representation, confirmed in writing. In some cases,
the risk may be so severe that the conflict may not be cured by client consent.
For a discussion of the effectiveness of client waivers of conflicts that might
arise in the future, see Rule 1.7, Comment [22]. For a definition of informed
consent, see Rule 1.0(f).
[10]
Where a lawyer has joined a private firm after having
represented the government, imputation is governed by Rule 1.11 (b) and (c),
not this Rule. Under Rule 1.11(d), where a lawyer represents the
government after having served clients in private practice, nongovernmental
employment or in another government agency, former-client conflicts are not
imputed to government lawyers associated with the individually disqualified
lawyer.
[11]
Where a lawyer is prohibited from engaging in certain transactions under Rule
1.8, paragraph (j) of that Rule, and not this Rule, determines whether that
prohibition also applies to other lawyers associated in a firm with the
personally prohibited lawyer.
History
Note: Statutory Authority G. 84-23
Adopted
July 24, 1997; Amended March 1, 2003.
ETHICS
OPINION NOTES
CPR
96. When different attorneys in the same firm are employed to represent
conflicting interests in related cases (estate in wrongful death case and
criminal defendant in homicide case), both must withdraw.
CPR
158. An attorney whose partner represented the wife in domestic litigation which resulted in parties holding real property as
co-tenants cannot subsequently represent the husband in a partition
proceeding.
CPR
274. Attorneys who merely share office space are not automatically
disqualified.
RPC 45. An attorney whose partner
represented the adverse party prior to joining the firm is not disqualified
unless the partner acquired confidential information material to the current
dispute. ( But see Rule 1.10(c))
RPC 49. Attorneys who own stock in
a real estate company may refer clients to the company if such would be in the
clients' best interest and there is full disclosure, but the attorneys and
other members of their law firm may not close transactions brokered by the real
estate firm.
RPC 55. A member of the Attorney
General's staff may prosecute appeals of adverse Medicaid decisions against the
Department of Human Resources, which is represented by another member of the
Attorney General's staff.
RPC 65. The public defender's
office should be considered as a single law firm and staff attorneys may not
represent co-defendants with conflicting interests unless both consent and can
be adequately represented.
RPC 73. Opinion clarifies two lines
of authority in prior ethics opinions. Where an attorney serves on a governing
body, such as a county commission, the attorney is disqualified from
representing criminal defendants if a member of the sheriff's department is a
prosecuting witness. The attorney's partners are not disqualified.
Where
an attorney advises a governing body, such as a county commission, but is not a
commissioner herself, and in that capacity represents the sheriff's department
relative to criminal matters, the attorney may not represent criminal
defendants if a member of the sheriff's department will be a prosecuting
witness. In this situation the attorney's partners would also be disqualified
from representing the criminal defendants.
RPC 248. A lawyer who owns stock in
a mortgage brokerage corporation may not act as the settlement agent for a loan
brokered by the corporation nor may the other lawyers in the firm certify title
or act as settlement agent for the closing.
99
Formal Ethics Opinion 3. Opinion rules that
lawyers in different field offices of Legal Services of North Carolina may
represent clients with materially adverse interests provided confidential
client information is not shared by the lawyers with the different field
offices.
2005
Formal Ethics Opinion 1. Opinion rules that a lawyer
may not appear before a judge who is a family member without consent from all
parties and, although consent is not required, the other members of the firm
must disclose the relationship before appearing before the judge.
2008
Formal Ethics Opinion 11. A lawyer may serve as the
trustee in a foreclosure proceeding while simultaneously representing the
beneficiary of the deed of trust on unrelated matters and that the other
lawyers in the firm may also continue to represent the beneficiary on unrelated
matters.
2010
Formal Ethics Opinion 12. Conflicts of interest
created by work performed by a law clerk are not imputed to other members of a
law firm.
CASE
NOTES
Cited
in Smith v. Beaufort County Hosp. Ass'n , 141 N.C. App. 203, 540 S.E.2d 775 (2000), cert denied,
353 N.C. 381, 547 S.E.2d 435 (2001).
Client-Lawyer Relationship
Rule 1.11
Special Conflicts of Interest for Former and Current Government Officers and
Employees
(a) Except as law may otherwise expressly permit, a lawyer who has
formerly served as a public officer or employee of the government:
(1) is
subject to Rule 1.9(c); and
(2) shall
not otherwise represent a client in connection with a matter in which the
lawyer participated personally and substantially as a public officer or
employee, unless the appropriate government agency gives its informed consent,
confirmed in writing, to the representation.
(b) When a lawyer is disqualified from representation under
paragraph (a), no lawyer in a firm with which that lawyer is associated may
knowingly undertake or continue representation in such a matter unless:
(1) the
disqualified lawyer is timely screened from any participation in the matter;
and
(2) written notice is promptly given to the appropriate government agency to
enable it to ascertain compliance with the provisions of this rule.
(c) Except as law may otherwise expressly permit, a lawyer having
information that the lawyer knows is confidential government information about
a person acquired when the lawyer was a public officer or employee, may not
represent a private client whose interests are adverse to that person in a
matter in which the information could be used to the material disadvantage of
that person. As used in this Rule, the term "confidential government
information" means information that has been obtained under governmental
authority and which, at the time this Rule is applied, the government is
prohibited by law from disclosing to the public or has a legal privilege not to
disclose and which is not otherwise available to the public. A firm with which
that lawyer is associated may undertake or continue representation in the
matter only if the disqualified lawyer is timely screened from any
participation in the matter.
(d) Except as law may otherwise expressly permit, a lawyer currently serving as
a public officer or employee:
(1) is
subject to Rules 1.7 and 1.9; and
(2) shall not:
(A) participate
in a matter in which the lawyer participated personally and substantially while
in private practice or nongovernmental employment, unless the appropriate
government agency gives its informed consent, confirmed in writing; or
(B) negotiate for private employment with any person who is involved as a party
or as lawyer for a party in a matter in which the lawyer is participating
personally and substantially, except that a lawyer serving as a law clerk to a
judge, other adjudicative officer or arbitrator may negotiate for private
employment as permitted by Rule 1.12(b) and subject to the conditions stated in
Rule 1.12(b).
(e) As used in this Rule, the term "matter" includes:
(1) any
judicial or other proceeding, application, request for a ruling or other
determination, contract, claim, controversy, investigation, charge, accusation,
arrest or other particular matter involving a specific party or parties, and
(2) any other matter covered by the conflict of interest rules of the
appropriate government agency.
Comment
[1] A lawyer who has served or is currently serving as a public officer or
employee is personally subject to the Rules of Professional Conduct, including
the prohibition against concurrent conflicts of interest stated in Rule 1.7. In
addition, such a lawyer may be subject to statutes and government regulations
regarding conflicts of interest. Such statutes and regulations may circumscribe
the extent to which the government agency may give consent under this
Rule. SeeRule 1.0(f) for the definition
of informed consent.
[2] Paragraphs (a)(1), (a)(2) and (d)(1) restate the obligations of an
individual lawyer who has served or is currently serving as an officer or employee
of the government toward a former government or private client. Rule 1.10,
however, is not applicable to the conflicts of interest addressed by this Rule.
Rather, paragraph (b) sets forth a special imputation rule for former
government lawyers that provides for screening and notice. Because of the
special problems raised by imputation within a government agency, paragraph (d)
does not impute the conflicts of a lawyer currently serving as an officer or
employee of the government to other associated government officers or
employees, although ordinarily it will be prudent to screen such lawyers.
[3] Paragraphs (a)(2) and (d)(2) impose additional obligations on a lawyer who
has served or is currently serving as an officer or employee of the government.
They apply in situations where a lawyer is not adverse to a former client and
are designed to prevent a lawyer from exploiting public office for the
advantage of another client. For example, a lawyer who has pursued a claim on
behalf of the government may not pursue the same claim on behalf of a later
private client after the lawyer has left government service, except when
authorized to do so by the government agency under paragraph (a). Similarly, a
lawyer who has pursued a claim on behalf of a private client may not pursue the
claim on behalf of the government, except when authorized to do so by paragraph
(d). As with paragraphs (a)(1) and (d)(1), Rule 1.10 is not applicable to the
conflicts of interest addressed by these paragraphs.
[4] This Rule represents a balancing of interests. On the one hand, where the
successive clients are a government agency and another client, public or
private, the risk exists that power or discretion vested in that agency might
be used for the special benefit of the other client. A lawyer should not be in
a position where benefit to the other client might affect performance of the
lawyer's professional functions on behalf of the government. Also, unfair
advantage could accrue to the other client by reason of access to confidential
government information about the client's adversary obtainable only through the
lawyer's government service. On the other hand, the rules governing lawyers
presently or formerly employed by a government agency should not be so
restrictive as to inhibit transfer of employment to and from the government.
The government has a legitimate need to attract qualified lawyers as well as to
maintain high ethical standards. The provisions for screening and waiver in
paragraph (b) are necessary to prevent the disqualification rule from imposing
too severe a deterrent against entering public service. The limitation of
disqualification in paragraphs (a)(2) and (d)(2) to matters involving a
specific party or parties, rather than extending disqualification to all substantive
issues on which the lawyer worked, serves a similar function.
[5] When a lawyer has been employed by one government agency and then moves to
a second government agency, it may be appropriate to treat that second agency
as another client for purposes of this Rule, as when a lawyer is employed by a
city and subsequently is employed by a federal agency. However, because the
conflict of interest is governed by paragraph (d), the latter agency is not
required to screen the lawyer as paragraph (b) requires a law
firm to do. The question of whether two government agencies should be
regarded as the same or different clients for conflict of interest purposes is
beyond the scope of these Rules. See Rule 1.13 Comment [9].
[6] Paragraphs (b) and (c) contemplate a screening arrangement. See Rule
1.0(l) (requirements for screening procedures). These paragraphs do not
prohibit a lawyer from receiving a salary or partnership share established by
prior independent agreement nor do they specifically prohibit the receipt of a
part of the fee from the screened matter. However, Rule 8.4(c) prohibits the
screened lawyer from participating in the fee if such participation was
impliedly or explicitly offered as an inducement to the lawyer to become
associated with the firm.
[7] Notice, including a description of the screened lawyer's prior
representation and of the screening procedures employed, generally should be
given as soon as practicable after the need for screening becomes apparent.
When disclosure is likely significantly to injure the client, a reasonable
delay may be justified.
[8] Paragraph (c) operates only when the lawyer in question has knowledge of
the information, which means actual knowledge; it does not operate with respect
to information that merely could be imputed to the lawyer.
[9] Paragraphs (a) and (d) do not prohibit a lawyer from jointly representing a
private party and a government agency when doing so is permitted by Rule 1.7
and is not otherwise prohibited by law.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003, October 6, 2004
ETHICS OPINION NOTES
CPR 208. A former U.S. attorney may represent criminal defendants and
civil plaintiffs against the United States so long as he did not
participate in substantially related matters while with the government.
CPR 245. A former assistant district attorney may not act as private prosecutor
in a case he was handling before he left the district attorney's office.
CPR 306. A former district attorney who prepared bills of indictment and
requests for extradition in a criminal case may not privately prosecute that
case.
CASE NOTES
No Per Se Disqualification. - Government employment as a
district attorney by an attorney formerly in private practice does not create a
per se disqualification of all the other government attorneys on his staff from
prosecuting or appearing at any time against his former clients of the attorney
who left private practice. State v. Reid , 104 N.C. App. 334, 410
S.E.2d 67 (1991), cert. granted , 331 N.C. 121, 414 S.E.2d 765
(1992), rev'd on other grounds, 334
N.C. 551, 434 S.E.2d 193 (1993).
Stated in State v. Reid ,
334 N.C. 551, 434 S.E.2d 193 (1993).
Client-Lawyer Relationship
Rule 1.12
Former Judge, Arbitrator, Mediator, or Other Third-Party Neutral
(a) Except as stated in paragraph (d), a lawyer shall not
represent anyone in connection with a matter in which the lawyer participated
personally and substantially as a judge or other adjudicative officer or law
clerk to such a person or as an arbitrator, mediator or other third-party
neutral, unless all parties to the proceeding give informed consent, confirmed
in writing.
(b) A lawyer shall not negotiate for employment with any person who is involved
as a party or as lawyer for a party in a matter in which the lawyer is
participating personally and substantially as a judge or other adjudicative
officer or as an arbitrator, mediator or other third-party neutral. A lawyer
serving as a law clerk to a judge or other adjudicative officer may negotiate
for employment with a party or lawyer involved in a matter in which the clerk
is participating personally and substantially, but only after the lawyer has
notified the judge or other adjudicative officer.
(c) If a lawyer is disqualified by paragraph (a), no lawyer in a firm with
which that lawyer is associated may knowingly undertake or continue
representation in the matter unless:
(1) the
disqualified lawyer is timely screened from any participation in the matter;
and
(2) written notice is promptly given to the parties and any appropriate
tribunal to enable them to ascertain compliance with the provisions of this
rule.
(d) An arbitrator selected as a partisan of a party in a
multimember arbitration panel is not prohibited from subsequently representing
that party.
Comment
[1] This Rule generally parallels Rule 1.11. The term "personally and
substantially" signifies that a judge who was a member of a multimember
court, and thereafter left judicial office to practice law, is not prohibited
from representing a client in a matter pending in the court, but in which the
former judge did not participate. So also the fact that a former judge
exercised administrative responsibility in a court does not prevent the former
judge from acting as a lawyer in a matter where the judge had previously
exercised remote or incidental administrative responsibility that did not
affect the merits. Compare the Comment to Rule 1.11. The term
"adjudicative officer" includes such officials as judges pro tempore,
referees, special masters, hearing officers and other parajudicial
officers, and also lawyers who serve as part-time judges.
[2] Like former judges, lawyers who have served as arbitrators, mediators or
other third-party neutrals may be asked to represent a client in a matter in
which the lawyer participated personally and substantially. This Rule forbids
such rep resentation unless all of the parties to the
proceedings give their informed consent, confirmed in writing. See Rule 1.0(f) and (c). Other law or codes of
ethics governing third-party neutrals may impose more stringent standards of
personal or imputed disqualification. See Rule 2.4.
[3] Although lawyers who serve as third-party neutrals do not have information
concerning the parties that is protected under Rule 1.6, they typically owe the
parties an obligation of confidentiality under law or codes of ethics governing
third-party neutrals. Thus, paragraph (c) provides that conflicts of the
personally disqualified lawyer will be imputed to other lawyers in a law firm
unless the conditions of this paragraph are met.
[4] Requirements for screening procedures are stated in Rule 1.0(l). Paragraph
(c)(1) does not prohibit the screened lawyer from receiving a salary or
partnership share established by prior independent agreement nor does it
specifically prohibit the receipt of a part of the fee from the screened
matter. However, Rule 8.4(c) prohibits the screened lawyer from participating
in the fee if such participation was impliedly or explicitly offered as an
inducement to the lawyer to become associated with the firm.
[5] Notice, including a description of the screened lawyer's prior
representation and of the screening procedures employed, generally should be
given as soon as practicable after the need for screening becomes apparent.
When disclosure is likely to significantly injure the client, a reasonable
delay may be justified.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 113. An attorney may not represent either party in a domestic case
after having signed a consent judgment in the matter as a judge.
RPC 138. A partner of a lawyer who
represents a party to an arbitration should not act as
an arbitrator. ( But see Rule
1.12(c))
2007 Formal Ethics Opinion
10.
A lawyer employed by a school board may serve as an administrative hearing
officer with the informed consent of the board.
2010
Formal Ethics Opinion 8. A lawyer who consults with
both parties to a dispute relative to the lawyer's prospective service as a
mediator may not subsequently represent one of the parties to the dispute.
Client-Lawyer Relationship
Rule
1.13 Organization As Client
(a) A lawyer employed or
retained by an organization represents the organization acting through its duly
authorized constituents.
(b) )
If a lawyer for an organization knows that an officer, employee. or other person associated with the organization is engaged
in action, intends to act or refuses to act in a matter related to the
representation that is a violation of a legal obligation to the organization,
or a violation of law which reasonably might be imputed to the organization,
and is likely to result in substantial injury to the organization, then the lawyer
shall proceed as is reasonably necessary in the best interest of the
organization. Unless the lawyer reasonably believes that it is not necessary in
the best interest of the organization to do so, the lawyer shall refer the
matter to higher authority in the organization, including, if warranted by the
circumstances, to the highest authority that can act on behalf of the
organization as determined by applicable law.
(c) If, despite the lawyer's
efforts in accordance with paragraph (b), the highest authority that can act on
behalf of the organization insists upon action, or a refusal to act, that is
clearly a violation of law and is likely to result in substantial injury to the
organization, the lawyer may reveal such information outside the organization to
the extent permitted by Rule 1.6 and may resign in accordance with Rule 1.16.
(d) Paragraph (c) shall not
apply with respect to information relating to a lawyer's representation of an
organization to investigate an alleged violation of law, or to defend the
organization or an officer, employee, or other constituent associated with the
organization against a claim arising out of an alleged violation of law.
(e) A lawyer who reasonably
believes that he or she has been discharged because of the lawyer's actions
taken pursuant to paragraphs (b) or (c), or who withdraws under circumstances
that require or permit the lawyer to take action under these Rules, shall
proceed as the lawyer reasonably believes necessary to assure that the
organization's highest authority is informed of the lawyer's discharge or
withdrawal.
(f) In dealing with an
organizationÕs directors, officers, employees, members, shareholders or other
constituents, a lawyer shall explain the identity of the client when the lawyer
knows or reasonably should know that the organizationÕs interests are adverse
to those of the constituents with whom the lawyer is dealing.
(g) A lawyer representing an
organization may also represent any of its directors, officers, employees,
members, shareholders or other constituents, subject to the provisions of Rule
1.7. If the organizationÕs consent to the dual representation is required by
Rule 1.7, the consent shall be given by an appropriate official of the
organization other than the individual who is to be represented, or by the
shareholders.
Comment
The Entity as the Client
[1] An organizational client
is a legal entity, but it cannot act except through its officers, directors,
employees, shareholders and other constituents. Officers, directors, employees
and shareholders are the constituents of the corporate organizational client.
The duties defined in this Rule apply equally to unincorporated associations.
ÒOther constituentsÓ as used in this Rule means the positions equivalent to
officers, directors, employees and shareholders held by persons acting for
organizational clients that are not corporations.
[2] When
one of the constituents of an organizational client communicates with the
organizationÕs lawyer in that personÕs organizational capacity, the communication
is protected by Rule 1.6. Thus, by way of example, if an organizational
client requests its lawyer to investigate allegations of wrongdoing, interviews
made in the course of that investigation between the lawyer and the clientÕs
employees or other constituents are covered by Rule 1.6. This does not mean,
however, that constituents of an organizational client are the clients of the
lawyer. The lawyer may not disclose to such constituents information relating
to the representation except for disclosures explicitly or impliedly authorized
by the organizational client in order to carry out the representation or as
otherwise permitted by Rule 1.6.
[3] When
constituents of the organization make decisions for it, the decisions
ordinarily must be accepted by the lawyer even if their utility or
prudence is doubtful. Decisions concerning policy and operations, including
ones entailing serious risk, are not as such in the lawyerÕs province.
Paragraph (b) makes clear, however, that when the lawyer knows that the
organization may be substantially injured by action of an officer or other
constituent that violates a legal obligation to the organization or is a
violation of the law that might be imputed to the organization, the lawyer must
proceed as is reasonably necessary in the best interest of the organization. As
defined in Rule 1.0(g), knowledge can be inferred from circumstances, and a
lawyer cannot ignore the obvious.
[4] In determining how to
proceed under paragraph (b), the lawyer should give due consideration to the
seriousness of the violation and its consequences, the responsibility in the
organization and the apparent motivation of the person involved, the policies
of the organization concerning such matters, and any other relevant
considerations. Ordinarily, referral to a higher authority would be necessary.
In some circumstances, however, it may be appropriate for the lawyer to ask the
constituent to reconsider the matter; for example, if the circumstances involve
a constituent's innocent misunderstanding of law and subsequent acceptance of
the lawyer's advice, the lawyer may reasonably conclude that the best interest
of the organization does not require that the matter be referred to higher
authority. If a constituent persists in conduct contrary to the lawyer's
advice, it will be necessary for the lawyer to take steps to have the matter
reviewed by a higher authority in the organization. If the matter is of
sufficient seriousness and importance or urgency to the organization, referral
to higher authority in the organization may be necessary even if the lawyer has
not communicated with the constituent. Any measures taken should, to the extent
practicable, minimize the risk of revealing information relating to the
representation to persons outside the organization. Even in circumstances where
a lawyer is not obligated by Rule 1.13 to proceed, a lawyer may bring to the
attention of an organizational client, including its highest authority, matters
that the lawyer reasonably believes to be of sufficient importance to warrant
doing so in the best interest of the organization.
[5] Paragraph (b) also makes
clear that when it is reasonably necessary to enable the organization to
address the matter in a timely and appropriate manner, the lawyer must refer
the matter to higher authority, including, if warranted by the circumstances,
the highest authority that can act on behalf of the organization under
applicable law. The organization's highest authority to whom
a matter may be referred ordinarily will be the board of directors or similar
governing body. However, applicable law may prescribe that under certain
conditions the highest authority reposes elsewhere, for example, in the
independent directors of a corporation.
Relation to Other Rules
[6] The authority and
responsibility provided in this Rule are concurrent with the authority and
responsibility provided in other Rules. In particular, this Rule does not limit
or expand the lawyer's responsibility under Rule 1.6, 1.8, 1.16, 3.3, or 4.1.
If the lawyer reasonably believes that disclosure of information protected by
Rule 1.6 is necessary to prevent the commission of a crime by an organizational
client, for example, disclosure is permitted by Rule
1.6(b)(2). If the lawyer's services are being or have been used by an
organizational client to further a crime or fraud by the organization, Rule
1.6(b)(4) permits the lawyer to disclose confidential information to prevent,
mitigate, or rectify the consequences of such conduct. In such circumstances,
Rule 1.2(d) may be applicable, in which event,
withdrawal from the representation under Rule 1.16(a)(1) may be required.
[7] Paragraph (d) makes clear
that the authority of a lawyer to disclose information relating to a
representation in circumstances described in paragraph (c) does not apply with
respect to information relating to a lawyer's engagement by an organization to
investigate an alleged violation of law or to defend the organization or an
officer, employee, or other person associated with the organization against a
claim arising out of an alleged violation of law. This is necessary in order to
enable organizational clients to enjoy the full benefits of legal counsel in
conducting an investigation or defending against a claim.
[8] A lawyer who reasonably
believes that he or she has been discharged because of the lawyer's actions
taken pursuant to paragraphs (b) and (c), or who withdraws in circumstances
that require or permit the lawyer to take action under these Rules, must
proceed as the lawyer reasonably believes necessary to assure that the
organization's highest authority is informed of the lawyer's discharge or
withdrawal.
Government Agency
[9] The duty defined in this
Rule applies to governmental organizations. Defining precisely the identity of
the client and prescribing the resulting obligations of such lawyers may be
more difficult in the government context and is a matter beyond the scope of
these Rules. See Scope [18]. Although in some circumstances the client may be a
specific agency, it may also be a branch of government, such as the executive
branch, or the government as a whole. For example, if the action or failure to
act involves the head of a bureau, either the department of which the bureau is
a part or the relevant branch of government may be the client for purposes of
this Rule. Moreover, in a matter involving the conduct of government officials,
a government lawyer may have authority under applicable law to question such
conduct more extensively than that of a lawyer for a private organization in
similar circumstances. Thus, when the client is a governmental organization, a
different balance may be appropriate between maintaining confidentiality and
assuring that the wrongful act is prevented or rectified, for public business
is involved. In addition, duties of lawyers employed by the
government or lawyers in military service may be defined by statutes and
regulation. This Rule does not limit that authority. See Scope.
Clarifying the LawyerÕs Role
[10] There are times when the
organizationÕs interest may be or become adverse to those of one or more of its
constituents. In such circumstances the lawyer should advise any constituent,
whose interest the lawyer finds adverse to that of the organization of the
conflict or potential conflict of interest, that the lawyer cannot represent
such constituent, and that such person may wish to obtain independent
representation. Care must be taken to assure that the individual understands
that, when there is such adversity of interest, the lawyer for the organization
cannot provide legal representation for that constituent individual, and that
discussions between the lawyer for the organization and the individual may not
be privileged.
[11] Whether
such a warning should be given by the lawyer for the organization to any
constituent individual may turn on the facts of each case.
Dual Representation
[12] Paragraph (g) recognizes
that a lawyer for an organization may also represent a principal officer or
major shareholder, director, employee, member, or other constituent.
Derivative Actions
[13] Under generally
prevailing law, the shareholders or members of a corporation may bring suit to
compel the directors to perform their legal obligations in the supervision of
the organization. Members of unincorporated associations have essentially the
same right. Such an action may be brought nominally by the organization, but
usually is, in fact, a legal controversy over management of the organization.
[14] The question can arise
whether counsel for the organization may defend such an action. The proposition
that the organization is the lawyerÕs client does not alone resolve the issue.
Most derivative actions are a normal incident of an organizationÕs affairs, to
be defended by the organizationÕs lawyer like any other suit. However, if the
claim involves serious charges of wrongdoing by those in control of the
organization, a conflict may arise between the lawyerÕs duty to the
organization and the lawyerÕs relationship with the board. In those
circumstances, Rule 1.7 governs who should represent the directors and the
organization.
History Note: Statutory
Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
Amended March 2, 2006
ETHICS OPINION NOTES
CPR 154. Because the town
attorney owes allegiance to the town and not to particular officials of the
town, he must disclose to any inquiring member of the town's board of
commissioners the subject of a town business meeting involving town officials
and other interested persons despite contrary instructions from the mayor.
CPR 227. The retained
attorney for a religious organization cannot represent citizens who want wills leaving property to the organization.
CPR 228. A retained attorney
for a religious organization cannot represent employees of the organization in
drawing wills.
CPR 235. An attorney may not
offer to draw wills free for church members who agree to contribute a certain
amount to the church.
CPR 271. An attorney who
drafted a partnership agreement cannot later represent some of the partners
against the partnership.
RPC 18. An attorney may not
simultaneously represent shareholders in a derivative action and the
corporation's landlord on a claim for back rent.
RPC 97. Counsel for a condominium
association may represent the association against a unit owner.
97
Formal Ethics Opinion 7. After a corporation files a
Chapter 7 bankruptcy petition and at the request of the bankruptcy trustee, a
lawyer who previously represented the corporation may continue to represent the
corporation's bankruptcy estate and the bankruptcy trustee in a civil action
provided the lawyer understands that the trustee is responsible for making
decisions about the representation and the representation is not adverse to a
former client of the lawyer.
2005
Formal Ethics Opinion 9. Opinion rules that a lawyer
for a publicly traded company does not violate the Rules of Professional
Conduct if the lawyer "reports out" confidential information as
permitted by SEC regulations.
Client-Lawyer Relationship
Rule 1.14
Client with Diminished Capacity
(a) When a client's capacity to
make adequately considered decisions in connection with a representation is
diminished, whether because of minority, mental impairment or for some other
reason, the lawyer shall, as far as reasonably possible, maintain a normal
client-lawyer relationship with the client.
(b) When the lawyer reasonably believes that the client has diminished
capacity, is at risk of substantial physical, financial or other harm unless
action is taken and cannot adequately act in the client's own interest, the
lawyer may take reasonably necessary protective action, including consulting
with individuals or entities that have the ability to take action to protect the
client and, in appropriate cases, seeking the appointment of a guardian ad
litem or guardian.
(c) Information relating to the representation of a client
with diminished capacity is protected by Rule 1.6. When taking
protective action pursuant to paragraph (b), the lawyer is impliedly authorized
under Rule 1.6(a) to reveal information about the client, but only to the
extent reasonably necessary to protect the client's interests.
Comment
[1] The normal client-lawyer relationship is based on the assumption that the
client, when properly advised and assisted, is capable of making decisions
about important matters. When the client is a minor or suffers from a
diminished mental capacity, however, maintaining the ordinary client-lawyer
relationship may not be possible in all respects. In particular, a severely
incapacitated person may have no power to make legally binding decisions.
Nevertheless, a client with diminished capacity often has the ability to
understand, deliberate upon, and reach conclusions about matters affecting the
client's own well-being. For example, children as young as five or six years of
age, and certainly those of ten or twelve, are regarded as having opinions that
are entitled to weight in legal proceedings concerning their custody. So also,
it is recognized that some persons of advanced age can be quite capable of
handling routine financial matters while needing special legal protection
concerning major transactions.
[2] The fact that a client suffers a disability does not diminish the lawyer's
obligation to treat the client with attention and respect. Even if the person
has a legal representative, the lawyer should as far as possible accord the
represented person the status of client, particularly in maintaining
communication.
[3] The client may wish to have family members or other persons participate in
discussions with the lawyer. When necessary to assist in the representation,
the presence of such persons generally does not affect the applicability of the
attorney-client evidentiary privilege. Nevertheless, the lawyer must keep the
client's interests foremost and, except for protective action authorized under
paragraph (b), must to look to the client, and not family members, to make
decisions on the client's behalf.
[4] If a legal representative has already been appointed for the client, the
lawyer should ordinarily look to the representative for decisions on behalf of
the client. In matters involving a minor, whether the lawyer should look to the
parents as natural guardians may depend on the type of proceeding or matter in
which the lawyer is representing the minor. If the lawyer represents the
guardian as distinct from the ward, and is aware that the guardian is acting
adversely to the ward's interest, the lawyer may have an obligation to prevent
or rectify the guardian's misconduct. See Rule 1.2(d).
Taking Protective Action
[5] If a lawyer reasonably believes that a client is at risk of substantial
physical, financial or other harm unless action is taken, and that a normal
client-lawyer relationship cannot be maintained as provided in paragraph (a)
because the client lacks sufficient capacity to communicate or to make
adequately considered decisions in connection with the representation, then
paragraph (b) permits the lawyer to take protective measures deemed necessary.
Such measures could include: consulting with family members, using a
reconsideration period to permit clarification or improvement of circumstances,
using voluntary surrogate decision-making tools such as durable powers of
attorney or consulting with support groups, professional services,
adult-protective agencies or other individuals or entities that have the
ability to protect the client. In taking any protective action, the lawyer
should be guided by such factors as the wishes and values of the client to the
extent known, the client's best interests and the goals of intruding into the
client's decision-making autonomy to the least extent feasible, maximizing
client capacities and respecting the client's family and social connections.
[6] In determining the extent of the client's diminished capacity, the lawyer
should consider and balance such factors as: the client's ability to articulate
reasoning leading to a decision, variability of state of mind and ability to
appreciate consequences of a decision; the substantive fairness of a decision;
and the consistency of a decision with the known long-term commitments and
values of the client. In appropriate circumstances, the lawyer may seek
guidance from an appropriate diagnostician.
[7] If a legal representative has not been appointed, the lawyer should
consider whether appointment of a guardian ad litem or guardian is necessary to
protect the client's interests. Thus, if a client with diminished capacity has
substantial property that should be sold for the client's benefit, effective
completion of the transaction may require appointment of a legal
representative. In addition, rules of procedure in litigation sometimes provide
that minors or persons with diminished capacity must be
represented by a guardian or next friend if they do not have a general
guardian. In many circumstances, however, appointment of a legal representative
may be more expensive or traumatic for the client than circumstances in fact
require. Evaluation of such circumstances is a matter entrusted to the
professional judgment of the lawyer. In considering alternatives, however, the
lawyer should be aware of any law that requires the lawyer to advocate the
least restrictive action on behalf of the client.
Disclosure of the Client's Condition
[8] Disclosure of the client's diminished capacity could adversely affect
the client's interests. For example, raising the question of diminished
capacity could, in some circumstances, lead to proceedings for involuntary
commitment. Information relating to the representation is
protected by Rule 1.6. Therefore, unless authorized to do so, the lawyer
may not disclose such information. When taking protective action pursuant to
paragraph (b), the lawyer is impliedly authorized to make the necessary
disclosures, even when the client directs the lawyer to the contrary.
Nevertheless, given the risks of disclosure, paragraph (c) limits what the
lawyer may disclose in consulting with other individuals or entities or seeking
the appointment of a legal representative. At the very least, the lawyer should
determine whether it is likely that the person or entity consulted with will
act adversely to the client's interests before discussing matters related to
the client. The lawyer's position in such cases is an unavoidably difficult
one.
Emergency Legal Assistance
[9] In an emergency where the health, safety or a financial interest of a
person with seriously diminished capacity is threatened with imminent and
irreparable harm, a lawyer may take legal action on behalf of such a person
even though the person is unable to establish a client-lawyer relationship or
to make or express considered judgments about the matter, when the person or
another acting in good faith on that person's behalf has consulted with the
lawyer. Even in such an emergency, however, the lawyer should not act unless
the lawyer reasonably believes that the person has no other lawyer, agent or
other representative available. The lawyer should take legal action on behalf
of the person only to the extent reasonably necessary to maintain the status
quo or otherwise avoid imminent and irreparable harm. A lawyer who undertakes
to represent a person in such an exigent situation has the same duties under
these Rules as the lawyer would with respect to a client.
[10] A lawyer who acts on behalf of a person with seriously diminished capacity
in an emergency should keep the confidences of the person as if dealing with a
client, disclosing them only to the extent necessary to accomplish the intended
protective action. The lawyer should disclose to any tribunal involved and to
any other counsel involved the nature of his or her relationship with the
person. The lawyer should take steps to regularize the relationship or implement
other protective solutions as soon as possible.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 314. An attorney who believes his or her client is not competent to make a
will may not prepare or preside over the execution of a will for that
client.
RPC 157. A lawyer may seek the
appointment of a guardian for a client the lawyer believes to be incompetent
over the client's objection if reasonably necessary to protect the client's
interest.
RPC 163. A lawyer may seek the
appointment of an independent guardian ad litem for a child whose guardian has
an obvious conflict of interest in fulfilling his fiduciary duties to the
child.
98 Formal Ethics Opinion 16. Opinion rules that a lawyer
may represent a person who is resisting an
incompetency petition although the person may suffer from a mental disability,
provided the lawyer determines that resisting the incompetency petition is not
frivolous.
98 Formal Ethics Opinion 18. Opinion rules that a lawyer
representing a minor owes the duty of confidentiality to the minor and may only
disclose confidential information to the minor's parent, without the minor's
consent, if the parent is the legal guardian of the minor and the disclosure of
the information is necessary to make a binding legal decision about the subject
matter of the representation.
2003 Formal Ethics Opinion
7.
A lawyer may not prepare a power of attorney for the benefit of the principal
at the request of another individual or third-party
payer without consulting with, exercising independent professional judgment on
behalf of, and obtaining consent from the principal.
2006 Formal Ethics Opinion
11.
Outside of the commercial or business context, a lawyer may not, at the request
of a third party, prepare documents, such as a will or trust instrument, that
purport to speak solely for principal without consulting with, exercising
independent professional judgment on behalf of, and obtaining consent from the
principal.
Rule 1.15
Safekeeping Property
Rule 1.15 Safekeeping Property - This rule has three subparts:
Rule 1.15-1, Definitions; Rule 1.15-2, General Rules; and Rule 1.15-3, Records
and Accountings. The subparts set forth the requirements for preserving client
property, including the requirements for preserving client property in a
lawyer's trust account. The comment for all three subparts as
well as the annotations appear after the text for Rule 1.15-3.
Client-Lawyer Relationship
Rule 1.15-1 Definitions
For purposes of this Rule 1.15, the following definitions apply:
(a) "Bank" denotes a bank or savings and loan association chartered
under North Carolina or federal law.
(b) "Client" denotes a person, firm, or other entity for whom a lawyer performs, or is engaged to perform, any legal
services.
(c) "Dedicated trust account" denotes a trust account that is
maintained for the sole benefit of a single client or with respect to a single
transaction or series of integrated transactions.
(d) ÒDemand depositÓ denotes any account from which deposited
funds can be withdrawn at any time without notice to the depository
institution.
(e) "Entrusted property" denotes trust funds, fiduciary
funds and other property belonging to someone other than the lawyer which is in
the lawyer's possession or control in connection with the performance of legal
services or professional fiduciary services.
(f) "Fiduciary account" denotes an account, designated as such,
maintained by a lawyer solely for the deposit of fiduciary funds or other
entrusted property of a particular person or entity.
(g) "Fiduciary funds" denotes funds belonging to someone other than
the lawyer that are received by or placed under the control of the lawyer in
connection with the performance of professional fiduciary services.
(h) "Funds" denotes any form of money, including cash, payment
instruments such as checks, money orders, or sales drafts, and receipts from
electronic fund transfers.
(i) "General trust account" denotes any
trust account other than a dedicated trust account.
(j) "Item" denotes any means or method by which funds are credited to
or debited from an account; for example: a check, substitute check, remotely
created check, draft, withdrawal order, automated clearinghouse (ACH) or
electronic transfer, electronic or wire funds transfer, electronic image of an
item and/or information in electronic form describing an item, or instructions
given in person or by telephone, mail, or computer.
(k) "Legal services" denotes services rendered by a lawyer in a
client-lawyer relationship.
(l) "Professional fiduciary services" denotes compensated services
(other than legal services) rendered by a lawyer as a trustee, guardian,
personal representative of an estate, attorney-in-fact, or escrow agent, or in
any other fiduciary role customary to the practice of law.
(m) "Trust account" denotes an account, designated as such,
maintained by a lawyer for the deposit of trust funds.
(n) "Trust funds" denotes funds belonging to someone other than the
lawyer that are received by or placed under the control of the lawyer in
connection with the performance of legal services.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997
Amended March 6, 2008, October 8, 2009; August 23, 2012
Client-Lawyer Relationship
(a) Entrusted Property. All
entrusted property shall be identified, held, and maintained separate from the
property of the lawyer, and shall be deposited, disbursed, and distributed only
in accordance with this Rule 1.15.
(b) Deposit of Trust Funds. All trust funds received by or placed under the
control of a lawyer shall be promptly deposited in either a general trust
account or a dedicated trust account of the lawyer. Trust funds placed in a
general account are those which, in the lawyer's good
faith judgment, are nominal or short-term. General trust accounts are to be
administered in accordance with the Rules of Professional Conduct and the
provisions of 27 NCAC Chapter 1, Subchapter D, Sections
.1300.
(c) Deposit of Fiduciary Funds. All fiduciary funds received by or placed under
the control of a lawyer shall be promptly deposited in a fiduciary account or a
general trust account of the lawyer.
(d) Safekeeping of Other Entrusted Property. A lawyer may also hold entrusted
property other than fiduciary funds (such as securities) in a fiduciary
account. All entrusted property received by a lawyer that is not deposited in a
trust account or fiduciary account (such as a stock certificate) shall be
promptly identified, labeled as property of the person or entity for whom it is
to be held, and placed in a safe deposit box or other suitable place of
safekeeping. The lawyer shall disclose the location of the property to the
client or other person for whom it is held. Any safe deposit box or other place
of safekeeping shall be located in this state, unless the lawyer
has been otherwise authorized in writing by the client or other person for whom
it is held.
(e) Location of Accounts. All trust accounts shall be maintained at a bank in
North Carolina or a bank with branch offices in North Carolina except that,
with the written consent of the client, a dedicated trust account may be
maintained at a bank that does not have offices in North Carolina or at a
financial institution other than a bank in or outside of North Carolina. A
lawyer may maintain a fiduciary account at any bank or other financial
institution in or outside of North Carolina selected by the lawyer in
the exercise of the lawyer's fiduciary responsibility.
(f) Segregation of Lawyer's Funds. No funds belonging to a lawyer shall be
deposited in a trust account or fiduciary account of the lawyer except:
(1) funds
sufficient to open or maintain an account, pay any bank service charges, or pay
any tax levied on the account; or
(2) funds belonging in part to a client or other third party and in part
currently or conditionally to the lawyer.
(g) Mixed Funds Deposited
Intact. When funds belonging to the lawyer are received in combination with
funds belonging to the client or other persons, all of the funds shall be
deposited intact. The amounts currently or conditionally belonging to the
lawyer shall be identified on the deposit slip or other record. After the
deposit has been finally credited to the account, the lawyer may withdraw the
amounts to which the lawyer is or becomes entitled. If the lawyer's entitlement
is disputed, the disputed amounts shall remain in the trust account or
fiduciary account until the dispute is resolved.
(h) Items Payable to Lawyer. Any item drawn on a trust account or fiduciary
account for the payment of the lawyer's fees or expenses shall be made payable
to the lawyer and shall indicate on the item the client balance on which the
item is drawn. Any item that does not capture this information may not be used
to withdraw funds from a trust account or a fiduciary account for payment of the
lawyer's fees or expenses.
(i)
No Bearer Items. No item shall be drawn on a trust account or fiduciary account
made payable to cash or bearer and no cash shall be withdrawn from a trust
account or fiduciary account by means of a debit card.
(j) No Personal Benefit. A lawyer shall not use or pledge any entrusted
property to obtain credit or other personal benefit for the lawyer or any
person other than the legal or beneficial owner of that property.
(k) Bank Directive. Every lawyer maintaining a trust account or fiduciary
account with demand deposit at a bank or other financial institution shall file
with the bank or other financial institution
a written directive requiring the bank or other institution to report to the
executive director of the North Carolina State Bar when an instrument drawn on
the account is presented for payment against insufficient funds. No trust
account or fiduciary account shall be maintained in a bank or other financial
institution that does not agree to make such reports.
(l) Notification of Receipt. A lawyer shall promptly notify his or her client
of the receipt of any entrusted property belonging in whole or in part to the
client.
(m) Delivery of Client Property. A lawyer shall promptly pay or deliver to the
client, or to third persons as directed by the client, any entrusted property
belonging to the client and to which the client is currently entitled.
(n) Property Received as Security. Any entrusted property or document of title
delivered to a lawyer as security for the payment of a fee or other obligation
to the lawyer shall be held in trust in accordance with this Rule 1.15 and
shall be clearly identified as property held as security and not as a completed
transfer of beneficial ownership to the lawyer. This provision does not apply
to property received by a lawyer on account of fees or other amounts owed to
the lawyer at the time of receipt; however, such transfers are subject to the
rules governing legal fees or business transactions between a lawyer and
client.
(o) Duty to Report Misappropriation. A lawyer who discovers or reasonably
believes that entrusted property has been misappropriated or misapplied shall
promptly inform the North Carolina State Bar.
(p) Interest on Deposited Funds. Under no circumstances shall the lawyer
be entitled to any interest earned on funds deposited in a trust account or
fiduciary account. Except as authorized by Rule .1316 of subchapter 1D of
the Rules and Regulations of the North Carolina State Bar, any interest earned
on a trust account or fiduciary account, less any amounts deducted for bank
service charges and taxes, shall belong to the client or other person or entity
entitled to the corresponding principal amount.
(q) Abandoned Property. If entrusted property is unclaimed, the lawyer shall
make due inquiry of his or her personnel, records and other sources of
information in an effort to determine the identity and location of the owner of
the property. If that effort is successful, the entrusted property shall be
promptly transferred to the person or entity to whom
it belongs. If the effort is unsuccessful and the provisions of G.S. 116B-53
are satisfied, the property shall be deemed abandoned, and the lawyer shall
comply with the requirements of Chapter 116B of the General Statutes concerning
the escheat of abandoned property.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003; March 6, 2008; February 5, 2009;
August 23, 2012
Client-Lawyer Relationship
Rule 1.15-3 Records and Accountings
(a) Check Format. All general trust accounts,
dedicated trust accounts, and fiduciary accounts must use business-size checks
that contain an Auxiliary On-Us field in the MICR line of the check.
(b) Minimum Records for Accounts at Banks. The
minimum records required for general trust accounts, dedicated trust accounts
and fiduciary accounts maintained at a bank shall consist of the following:
(1) all records listing the source and date of receipt of any
funds deposited in the account including, but not limited to, bank receipts,
deposit slips and wire and electronic transfer confirmations, and, in the case
of a general trust account, all records also listing the name of the client or
other person to whom the funds belong;
(2) all canceled checks or other items drawn on the account, or
printed digital images thereof furnished by the bank, showing the amount, date,
and recipient of the disbursement, and, in the case of a general trust account,
the client balance against which each item is drawn, provided, that:
(A) digital images must be legible reproductions of the front
and back of the original items with no more than six images per page and no
images smaller than 1-3/16 x 3 inches; and
(B) the bank must maintain, for at least six years, the capacity
to reproduce electronically additional or enlarged images of the original items
or records related thereto upon request within a reasonable time;
(3) all instructions or authorizations to transfer, disburse, or
withdraw funds from the trust account (including electronic transfers or
debits), or a written or electronic record of any such transfer, disbursement,
or withdrawal showing the amount, date, and recipient of the transfer or
disbursement, and, in the case of a general trust account, also showing the
name of the client or other person to whom the funds belong;
(4) all bank statements and other documents received from the
bank with respect to the trust account, including, but not limited to notices
of return or dishonor of any item drawn on the account against insufficient
funds;
(5) in the case of a general trust account, a ledger containing
a record of receipts and disbursements for each person or entity from whom and
for whom funds are received and showing the current balance of funds held in
the trust account for each such person or entity; and
(6) any other records required by law to be maintained for the
trust account.
(c) Minimum Records for Accounts at Other
Financial Institutions. The minimum records required for dedicated trust
accounts and fiduciary accounts at financial institutions other than a bank
shall consist of the following:
(1) all records listing the source and date of receipt of all
funds deposited in the account including, but not limited to, depository
receipts, deposit slips, and wire and electronic transfer confirmations;
(2) a copy of all checks or other items drawn on the account, or
printed digital images thereof furnished by the depository, showing the amount,
date, and recipient of the disbursement, provided, that the images satisfy the
requirements set forth in Rule 1.15-3(b)(2);
(3) all instructions or authorizations to transfer, disburse, or
withdraw funds from the account (including electronic transfers or debits) or a
written or electronic record of any such transfer, disbursement, or withdrawal
showing the amount, date, and recipient of the transfer or disbursement;
(4) all statements and other documents received from the
depository with respect to the account, including, but not limited to notices
of return or dishonor of any item drawn on the account for insufficient funds;
and
(5) any other records required by law to be maintained for the
account.
(d) Reconciliations of General Trust Accounts.
(1)
Quarterly Reconciliations. At least quarterly, the individual client balances
shown on the ledger of a general trust account must be totaled and reconciled
with the current bank statement balance for the trust account as a whole.
(2) Monthly
Reconciliations. Each month, the balance of the trust account as shown on the
lawyer's records shall be reconciled with the current bank statement balance
for the trust account.
(3) The
lawyer shall retain a record of the reconciliations of the general trust
account for a period of six years in accordance with Rule 1.15-3(g).
(e) Accountings for Trust Funds. The lawyer shall
render to the client a written accounting of the receipts and disbursements of
all trust funds (i) upon the complete disbursement of
the trust funds, (ii) at such other times as may be reasonably requested by the
client, and (iii) at least annually if the funds are retained for a period of
more than one year.
(f) Accountings for Fiduciary Property.
Inventories and accountings of fiduciary funds and other entrusted property
received in connection with professional fiduciary services shall be rendered
to judicial officials or other persons as required by law. If an annual or more
frequent accounting is not required by law, a written accounting of all
transactions concerning the fiduciary funds and other entrusted property shall
be rendered to the beneficial owners, or their representatives, at least
annually and upon the termination of the lawyer's professional fiduciary
services.
(g) Minimum Record Keeping Period. A lawyer shall
maintain, in accordance with this Rule 1.15, complete and accurate records of
all entrusted property received by the lawyer, which records shall be
maintained for at least the six (6) year period immediately preceding the
lawyer's most recent fiscal year end.
(h) Audit by State Bar. The financial records
required by this Rule 1.15 shall be subject to audit for cause and to random
audit by the North Carolina State Bar; and such records shall be produced for
inspection and copying in North Carolina upon request by the State
Bar.
Comment
[1] The purpose of a lawyer's trust account or
fiduciary account is to segregate the funds belonging to others from those
belonging to the lawyer. Money received by a lawyer while providing legal
services or otherwise serving as a fiduciary should never be used for personal
purposes. Failure to place the funds of others in a trust or fiduciary account
can subject the funds to claims of the lawyer's creditors or place the funds in
the lawyer's estate in the event of the lawyer's death or disability.
Property Subject to these Rules
[2] Any property belonging to a client or other person or entity that is
received by or placed under the control of a lawyer in connection with the
lawyer's furnishing of legal services or professional fiduciary services must
be handled and maintained in accordance with this Rule 1.15. The minimum
records to be maintained for accounts in banks differ from the minimum records
to be maintained for accounts in other financial institutions (where
permitted), to accommodate brokerage accounts and other accounts with differing
reporting practices.
Client Property
[3] Every lawyer who receives funds belonging to a client must maintain a trust
account. The general rule is that every receipt of money from a client or for a
client, which will be used or delivered on the
client's behalf, is held in trust and should be placed in the trust account.
All client money received by a lawyer, except that to which the lawyer is
immediately entitled, must be deposited in a trust account, including funds for
payment of future fees and expenses. Client funds must be promptly deposited into
the trust account. Client funds must be deposited in a general trust account if
there is no duty to invest on behalf of the client. Generally speaking, if a
reasonably prudent person would conclude that the funds in question, either
because they are nominal in amount or are to be held for a short time, could
probably not earn sufficient interest to justify the cost of investing, the
funds should be deposited in the general trust account. In determining whether
there is a duty to invest, a lawyer shall exercise his or her professional
judgment in good faith and shall consider the following:
a) The amount of the funds to be deposited;
b) The expected duration of the deposit,
including the likelihood of delay in the matter for which the funds are held;
c) The rates of interest or yield at financial
institutions where the funds are to be deposited;
d) The cost of establishing and administering
dedicated accounts for the client's benefit, including the service charges, the
costs of the lawyer's services, and the costs of preparing any tax reports
required for income accruing to the client's benefit;
e) The capability of financial institutions,
lawyers, or law firms to calculate and pay income to individual clients;
f) Any other circumstances that affect the
ability of the client's funds to earn a net return for the client.
When regularly reviewing the trust accounts, the
lawyer shall determine whether changed circumstances require further action
with respect to the funds of any client. The determination of whether a
client's funds are nominal or short-term shall rest in the sound judgment of
the lawyer or law firm. No lawyer shall be charged with an ethical impropriety
or breach of professional conduct based on the good faith exercise of such
judgment
[4] A law firm with offices in another state may
send a North Carolina client's funds to a firm office in another state for
centralized processing provided, however, the funds are promptly deposited into
a trust account with a bank that has branch offices in North Carolina, and
further provided, the funds are transported and held in a safe place until
deposited into the trust account. If this procedure is followed, client consent
to the transfer of the funds to an out-of-state office of the firm is not
required. However, all such client funds are subject to the requirements of
these rules. Funds delivered to the lawyer by the client for payment of future
fees or expenses should never be used by the lawyer for personal purposes or
subjected to the potential claims of the lawyer's creditors.
[5] This rule does not prohibit a lawyer who receives an instrument belonging
wholly to a client or a third party from delivering the instrument to the
appropriate recipient without first depositing the instrument in the lawyer's
trust account.
Property from Professional Fiduciary Service
[6] The phrase "professional fiduciary service," as used in this
rule, is service by a lawyer in any one of the various fiduciary roles
undertaken by a lawyer that is not, of itself, the practice of law, but is
frequently undertaken in conjunction with the practice of law. This includes
service as a trustee, guardian, personal representative of an estate,
attorney-in-fact, and escrow agent, as well as service in other fiduciary roles
"customary to the practice of law."
[7] Property held by a lawyer performing a professional fiduciary service must
also be segregated from the lawyer's personal property, properly labeled, and
maintained in accordance with the applicable provisions of this rule.
[8] When property is entrusted to a lawyer in connection with a lawyer's
representation of a client, this rule applies whether or not the lawyer is
compensated for the representation. However, the rule does not apply to
property received in connection with a lawyer's uncompensated service as a
fiduciary such as a trustee or personal representative of an estate. (Of
course, the lawyer's conduct may be governed by the law
applicable to fiduciary obligations in general, including a fiduciary's
obligation to keep the principal's funds or property separate from the
fiduciary's personal funds or property, to avoid self-dealing, and to account
for the funds or property accurately and promptly).
[9] Compensation distinguishes professional fiduciary service from a fiduciary
role that a lawyer undertakes as a family responsibility, as a courtesy to
friends, or for charitable, religious or civic purposes. As used in this rule,
"compensated services" means services for
which the lawyer obtains or expects to obtain money or any other valuable
consideration. The term does not refer to or include reimbursement for actual
out-of-pocket expenses.
Property Excluded from Coverage of Rules
[10] This rule also does not apply when a lawyer is handling money for a
business or for a religious, civic, or charitable organization as an officer,
employee, or other official regardless of whether the lawyer is compensated for
this service. Handling funds while serving in one of these roles does not
constitute "professional fiduciary service," and such service is not
"customary to the practice of law."
Burden of Proof
[11] When a lawyer is entrusted with property belonging to others and does not
comply with these rules, the burden of proof is on the lawyer to establish the
capacity in which the lawyer holds the funds and to demonstrate why these rules
should not apply.
Prepaid Legal Fees
[12] Whether a fee that is prepaid by the client
should be placed in the trust account depends upon the fee arrangement with the
client. A retainer fee in its truest sense is a payment by the client for the
reservation of the exclusive services of the lawyer, which is not used to pay
for the legal services provided by the lawyer and, by
agreement of the parties, is nonrefundable upon discharge of the lawyer. It is
a payment to which the lawyer is immediately entitled and, therefore, should
not be placed in the trust account. A "retainer," which is actually a
deposit by the client of an advance payment of a fee to be billed on an hourly
or some other basis, is not a payment to which the lawyer is immediately
entitled. This is really a security deposit and should be placed in the trust
account. As the lawyer earns the fee or bills against the deposit, the funds
should be withdrawn from the account. Rule 1.16(d) requires the refund to the
client of any part of a fee that is not earned by the lawyer at the time that
the representation is terminated.
Abandoned Property
[13] Should a lawyer need technical assistance concerning the escheat of
property to the State ofNorth Carolina, the lawyer
should contact the escheat officer at the Office of the North Carolina State
Treasurer in Raleigh, North Carolina, .
Disputed Funds
[14] A lawyer is not required to remit to the client
funds that the lawyer reasonably believes represent fees owed. However, a
lawyer may not hold funds to coerce a client into accepting the lawyer's
contention. The disputed portion of the funds must be kept in a trust account
and the lawyer should suggest means for prompt resolution of the dispute, such
as the State Bar's program for fee dispute resolution. See Rule
1.5(f). The undisputed portion of the funds shall be promptly distributed.
[15] Third parties may have lawful claims against specific funds or other
property in a lawyer's custody, such as a client's creditor who has a lien on
funds recovered in a personal injury action. A lawyer may have a duty under
applicable law to protect such third-party claims against wrongful interference
by the client. In such cases, when the third-party claim is not frivolous under
applicable law, the lawyer must refuse to surrender the property to the client
until the claim is resolved. A lawyer should not unilaterally assume to
arbitrate a dispute between the client and the third party, but, when there are
substantial grounds for dispute as to the person entitled to the funds, the
lawyer may file an action to have a court resolve the dispute.
Responsibility for Records and Accountings
[16] It is the lawyer's responsibility to assure that
complete and accurate records of the receipt and disbursement of entrusted
property are maintained in accordance with this rule. The required record
retention period of six years set forth in this rule does not preclude the
State Bar from seeking records for a period prior to the retention period and,
if obtained, from pursuing a disciplinary action based thereon if such action
is not prohibited by law or other rules of the State Bar.
[17] Many businesses are now converting paper
checks to automated clearinghouse (ACH) debits to decrease costs and increase
operating efficiencies. When a check is converted, the check is taken either at
the point-of-sale or through the mail for payment, the account information is
captured from the check, and an electronic transaction is created for payment
through the ACH system. The original physical check is typically destroyed by
the converting entity (although an image of the check may be stored for a
certain period of time). If a check drawn on a trust account is converted to
ACH, the lawyer will not receive either the physical check or a check image.
The transaction will appear on the lawyer's trust account statement as an ACH
debit with limited information about the payment (e.g., dollar amount, date
processed, originator of the ACH debit).
[18] To prevent conversion of a check to ACH
without authorization, a lawyer is required to use checks with an
"Auxiliary On-Us field." A check will not be eligible for conversion
to ACH if it contains an Auxiliary On-Us field, which is an additional field
that appears in the left-most position of the MICR (magnetic ink character
recognition) line on a business size check. The lawyer should confirm with the
lawyer's financial institution that the Auxiliary On-Us field is included on the
lawyer's trust account checks. Including an Auxiliary On-Us field on the check
will require using checks that are longer than six inches. As with the other
information in the MICR line of a check, the routing, account and payment
numbers, the financial institution issuing the check determines the content of
the Auxiliary On-Us field.
[19] Authorized ACH debits that are electronic
transfers of funds (in which no checks are involved) are allowed provided the
lawyer maintains a record of the transaction as required by Rule 1.15-3(b)(3)
and (c)(3). The record, whether consisting of the instructions or authorization
to debit the account, a record or receipt from the register of deeds or a
financial institution, or the lawyer's independent record of the transaction,
must show the amount, date, and recipient of the transfer or disbursement, and,
in the case of a general trust account, also show the name of the client or
other person to whom the funds belong.
[20] The lawyer is responsible for keeping a
client, or any other person to whom the lawyer is accountable, advised of the
status of entrusted property held by the lawyer. In addition, the lawyer must
take steps to discover any unauthorized transactions involving trust funds as
soon as possible. Therefore, it is essential that the lawyer regularly
reconcile a general trust account. This means that, at least once a month, the
lawyer must reconcile the current bank statement balance with the balance shown
for the entire account in the lawyer's records, such as a check register or its
equivalent, as of the date of the bank statement. At least once a quarter, the
lawyer must reconcile the individual client balances shown on the lawyer's
ledger with the current bank statement balance. Monthly reconciliation will help
to uncover unauthorized ACH transactions promptly. The current bank balance is
the balance obtained when subtracting outstanding checks and other withdrawals
from the bank statement balance and adding outstanding deposits to the bank
statement balance. With regard to trust funds held in any trust account, there
is also an affirmative duty to produce a written accounting for the client and
to deliver it to the client, either at the conclusion of the transaction or
periodically if funds are held for an appreciable period. Such accountings must
be made at least annually or at more frequent intervals if reasonably requested
by the client.
Bank Notice of Overdrafts
[20] A properly maintained trust account should not
have any items presented against insufficient funds. However, even the
best-maintained accounts are subject to inadvertent errors by the bank or the
lawyer, which may be easily explained. The reporting requirement should not be
burdensome and may help avoid a more serious problem.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003, October 6, 2004; March 6, 2008
ETHICS OPINION NOTES
CPR 358. An
attorney may not use the "float" in his trust account to cover checks
written against funds represented by a deposited but uncollected negotiable
instrument. Disbursements may be made in advance of actual collection if the
bank provisionally credits the trust account upon deposit of the instrument. ( See also RPC 191.)
CPR 375. An attorney's fee may be the interest earned on escrowed funds if the
client agrees.
RPC 4. A public
defender who retains funds for an incarcerated
defendant as a favor must deposit the funds in a trust account.
RPC 37. A law firm
which has received money representing the refund of an appeal bond to a client
owing substantial fees to the firm may not apply the appeal bond refund to the
fees unless an agreement with the client would authorize the firm to do
so.
RPC 44. A closing
attorney must follow the lender's closing instruction that closing documents be
recorded prior to disbursement.
RPC 47. An
attorney who receives from his or her client a small sum of money
which is to be used to pay the cost of recording a deed must deposit
that money in a trust account.
RPC 48. Opinion
outlines professional responsibilities of lawyers involved in a law firm
dissolution.
RPC 51. Where a
lawyer receives a lump sum payment in advance which is
inclusive of the costs of litigation, the portion representing the costs must
be deposited in the trust account.
RPC 66. An
attorney serving as an escrow agent may not disburse in a manner not
contemplated by the escrow agreement unless all parties agree.
RPC 69. A lawyer
must obey the client's instruction not to pay medical providers from the
proceeds of settlement in the absence of a valid physician's lien.
RPC 75. A lawyer
may not pay his or her fee or the fee of a physician from funds held in trust
for a client without the client's authority.
RPC 78. A closing
attorney cannot make conditional delivery of trust account checks to real
estate agent before depositing loan proceeds against which checks are to be
drawn.
RPC 86. Opinion
discusses disbursement against uncollected funds, accounting for earnest money
paid outside closing, and representation of the seller. ( See
also RPC 191.)
RPC 89. Trust
funds must be held at least five years after the last occurrence of certain
prescribed events before they may be deemed abandoned.
RPC 96. Attorneys
practicing in North Carolina who are affiliated with an interstate
law firm may not permit trust funds belonging to their clients to be deposited
in a trust account maintained outside North Carolina without written
consent. ( See also Rule
1.15-2(e))
RPC 125. An
attorney may not pay a medical care provider from the proceeds of a settlement
negotiated prior to the filing of suit over his client's objection unless the
funds are subject to a valid lien.
RPC 149. An
attorney may not donate a client's funds to a charity without the client's
consent.
RPC 150. An
attorney cannot permit a bank to link her trust and business accounts for the
purpose of determining interest earned or charges assessed if such an
arrangement causes the attorney to use client funds from the trust account to
offset service charges assessed on the business account.
RPC 158. A sum of
money paid to a lawyer in advance to secure payment of a fee
which is yet to be earned and to which the lawyer is not entitled must
be deposited in the lawyer's trust account.
RPC 191. A lawyer
may make disbursements from his or her trust account in reliance upon the
deposit of funds provisionally credited to the account if the funds are
deposited in the form of instruments as specified in the Good Funds Settlement
Act (Chap. 45A of N.C. Gen. Stat.).
RPC 209. Opinion
provides guidelines for the disposal of closed client files.
RPC 226. When a law
firm receives funds that are not identified as client funds, the firm must
investigate the ownership of the funds and, if it is reasonable to conclude the
funds do not belong to a client or a third party, the firm may conclude that
the funds belong to the firm.
RPC 234. An
inactive client file may be stored in an electronic format provided original
documents with legal significance are preserved and the documents in the
electronic file can be reproduced on paper.
RPC 247. Opinion
provides guidelines for receipt of payment of earned and unearned fees by
electronic transfers.
97 Formal Ethics Opinion 4. Opinion provides that flat fees may be collected at the
beginning of a representation, treated as presently owed to the lawyer, and
deposited into the lawyer's general operating account or paid to the lawyer but
that if a collected fee is clearly excessive under the circumstances of the
representation, a refund to the client of some or all of the fee is required.
97 Formal Ethics Opinion 9. Provided steps are taken to safeguard the client funds on
deposit in a trust account, a lawyer may accept fees paid by credit card
although the bank's agreement to process such charges authorizes the bank to
debit the lawyer's trust account in the event a credit card charge is disputed
by a client.
98 Formal Ethics Opinion 11. Opinion rules that the fiduciary relationship that arises
when a lawyer serves as an escrow agent demands that the lawyer be impartial to
both the obligor and the obligee and, therefore, the
lawyer may not act as advocate for either party against the other. Once the
fiduciary duties of the escrow agent terminate, the lawyer may take a position
adverse to the obligor or the obligee provided the
lawyer is not otherwise disqualified.
98 Formal Ethics Opinion 14. Opinion rules that a lawyer may participate in the
solicitation of funds from third parties to pay the legal fees of a client
provided there is disclosure to contributors and the funds are administered
honestly.
98 Formal Ethics Opinion 15. Opinion rules that whether the year 2000
computer problem is being adequately addressed by a depository bank
should be considered when selecting a depository bank for a trust account.
2000 Formal Ethics Opinion 4. Opinion rules that a lawyer may sign a statement
acknowledging a finance company's interest in a client's recovery subject to
certain conditions.
2001 Formal Ethics Opinion 3. Opinion rules that a lawyer may settle a tort claim by
making disbursements from a trust account in reliance upon the deposit of funds
provisionally credited to the account if the deposited finds are in the form of
a financial instrument that is specified in the Good Funds Settlement Act, G.S.
Chap. 45A.
2001 Formal Ethics Opinion 11. Opinion rules that when a client authorizes a lawyer to
represent to a medical provider that it will be paid upon the settlement of a
personal injury claim, the lawyer may subsequently withhold settlement proceeds
from the client and maintain the funds in her trust account, although there is
not a medical lien against the funds, until a dispute between the client and
the medical provider over the disbursement of the funds is resolved.
2001 Formal Ethics Opinion 14. Opinion rules that retaining a CD-ROM with digital images of
trust account checks that is provided by the depository bank satisfies
record-keeping requirements for trust accounts.
2005 Formal Ethics Opinion 11. Opinion examines the requirements for an interim
account used to pay the costs for real estate closings and also rules that the
actual costs may be marked up by the lawyer provided there is full disclosure
and the overcharges are not clearly excessive.
2005 Formal Ethics Opinion 13. Opinion rules that a minimum fee that will be billed
against at an hourly rate and is collected at the beginning of representation
belongs to the client and must be deposited into the trust account until earned
and, upon termination of representation, the unearned portion of the fee must
be returned to the client.
2006 Formal Ethics Opinion 8. A lawyer may disburse against deposited items in reliance
upon a bank's funding schedule under certain circumstances.
2006 Formal Ethics Opinion 15. A lawyer may charge a reasonable dormancy fee against
unclaimed funds if the client agrees in advance and the fee meets other
statutory requirements.
2006 Formal Ethics Opinion 16. Under certain circumstances a lawyer may consider a dispute
with a client over legal fees resolved and transfer funds from the trust
account to his operating account to pay those fees.
2008 Formal Ethics Opinion 10. Opinion surveys prior ethics opinions on legal fees, sets
forth the ethical requirements for the different types of fees paid in advance,
authorizes minimum fees earned upon payment, and provides model fee
provisions.
2008 Formal Ethics Opinion 13. Unless affected clients expressly consent to the disclosure
of their confidential information, a lawyer may allow a title insurer to audit
the lawyer's real estate trust account and reconciliation reports only if
certain written assurances to protect client confidences are obtained from the
title insurer, the audited account is only used for real estate closings and
the audit is limited to certain records and to real estate transactions insured
by the title insurer.
2009 Formal Ethics Opinion 4. A law firm may establish a credit card account that avoids
commingling by depositing unearned fees into the law firm's trust account and
earned fees into the law firm's operating account provided the problem of
chargebacks is addressed.
2010 Formal Ethics Opinion 4. All advance payments of litigation expenses by a barter
exchange client must be paid in cash or by check or credit card.
2011 Formal Ethics Opinion 6. A law firm may contract with a vendor of software as a
service provided the lawyer uses reasonable care to safeguard confidential
client information.
A law firm may use on-line banking to manage its
trust accounts provided the firmÕs managing lawyers are regularly educated on
the security risks and actively maintain end-user security.
2011 Formal Ethics Opinion 7. A law firm may use on-line banking to manage its trust
accounts provided the firmÕs managing lawyers are regularly educated on the
security risks and actively maintain end-user security.
2011 Formal Ethics Opinion 10. A lawyer may advertise on a website that offers daily
discounts to consumers where the website companyÕs compensation is a percentage
of the amount paid to the lawyer if certain disclosures are made and certain
conditions are satisfied.
2011 Formal Ethics Opinion 13. Client funds or the funds of a third party that are placed
in the lawyerÕs control for the purpose of being safeguarded, managed or
disbursed in connection with a transaction, but which were not designated or
identified as funds for the payment of legal fees, may not be retained in the
trust account, pursuant to Rule 1.15-2(g), as disputed funds to which the
lawyer may be entitled.
CASE NOTES
Failure to Maintain Records. - The attorney violated the minimum
record-keeping requirements of Rule 10.2 [of the superseded (1985) Rules of
Professional Conduct] when he failed to maintain any ledgers or other records
showing a running balance of each individual client's funds. The attorney's
possession of check stubs, canceled checks, and bank statements failed to meet
the minimum requirements. North Carolina State Bar v. Sheffield ,
73 N.C. App. 349, 326 S.E.2d 320,cert. denied , 474 U.S. 981, 106
S. Ct. 385, 88 L. Ed. 2d 338 (1985).
Motive for Commingling Funds Not Pertinent to Issue of Violation. - A lawyer's
motive for commingling personal funds with client funds in his trust account is
not pertinent to whether defendant violated Code of Professional
Responsibility. The Code states that an attorney may keep personal funds in a
client trust account for only two limited purposes. If an attorney leaves
personal funds in a client trust account for any other purpose, then he has
violated the Code.North Carolina State Bar
v. Speckman , 87 N.C. App. 116, 360 S.E.2d 129 (1987).
Disbursement of Judgment to Plaintiff and Attorney. -
Nothing improper in clerk's disbursement of judgment funds to plaintiffs with
their attorney also named as payee on the check, endorsed by plaintiffs and
deposited in the trust account of plaintiffs' attorney. Poore v. Swan Quarter Farms, Inc. , 119 N.C.
App. 546, 459 S.E.2d 52 (1995).
Client-Lawyer Relationship
Rule 1.15-4
Interest On Lawyers' Trust Accounts - Reserved
Client-Lawyer Relationship
Rule 1.16
Declining or Terminating Representation
(a) Except as stated in paragraph (c), a lawyer shall not
represent a client or, where representation has commenced, shall withdraw from
the representation of a client if:
(1) the
representation will result in violation of law or the Rules of Professional
Conduct;
(2) the lawyer's physical or mental condition materially impairs the lawyer's
ability to represent the client; or
(3) the lawyer is discharged.
(b) Except as stated in paragraph (c), a lawyer may withdraw from
representing a client if:
(1) withdrawal
can be accomplished without material adverse effect on the interests of the
client; or
(2) the client knowingly and freely assents to the termination of the
representation; or
(3) the client persists in a course of action involving the lawyer's services
that the lawyer reasonably believes is criminal or fraudulent; or
(4) the client insists upon taking action that the lawyer considers repugnant,
imprudent, or contrary to the advice and judgment of the lawyer, or with which
the lawyer has a fundamental disagreement; or
(5) the client has used the lawyer's services to perpetrate a crime or fraud;
or
(6) the client fails substantially to fulfill an obligation to the lawyer
regarding the lawyer's services and has been given reasonable warning that the
lawyer will withdraw unless the obligation is fulfilled; or
(7) the representation will result in an unreasonable financial burden on the
lawyer or has been rendered unreasonably difficult by the client; or
(8) the client insists upon presenting a claim or defense that is not warranted
under existing law and cannot be supported by good faith argument for an
extension, modification, or reversal of existing law; or
(9) other good cause for withdrawal exists.
(c) A lawyer must comply with applicable law requiring notice to
or permission of a tribunal when terminating a representation. When ordered to
do so by a tribunal, a lawyer shall continue representation notwithstanding
good cause for terminating the representation.
(d) Upon termination of representation, a lawyer shall take steps to the extent
reasonably practicable to protect a client's interests, such as giving
reasonable notice to the client, allowing time for employment of other counsel,
surrendering papers and property to which the client is entitled and refunding
any advance payment of fee or expense that has not been earned or incurred. The
lawyer may retain papers relating to the client to the extent permitted by
other law.
Comment
[1] A lawyer should not accept representation in a
matter unless it can be performed competently, promptly, without improper
conflict of interest and to completion. Ordinarily, a representation in a
matter is completed when the agreed-upon assistance has been concluded.See Rules
1.2(c) and 6.5. See also Rule 1.3, Comment [4].
Mandatory Withdrawal
[2] A lawyer ordinarily must decline or withdraw
from representation if the client demands that the lawyer engage in conduct
that is illegal or violates the Rules of Professional Conduct or other law. The
lawyer is not obliged to decline or withdraw simply because the client suggests
such a course of conduct; a client may make such a suggestion in the hope that
a lawyer will not be constrained by a professional obligation.
[3] When a lawyer has been appointed to represent a client, withdrawal
ordinarily requires approval of the appointing authority. Similarly, court approval or notice to the court is often required by
applicable law before a lawyer withdraws from pending litigation.
Difficulty may be encountered if withdrawal is based on the client's demand
that the lawyer engage in unprofessional conduct. The court may request an
explanation for the withdrawal, while the lawyer may be bound to keep
confidential the facts that would constitute such an explanation. The lawyer's
statement that professional considerations require termination of the
representation ordinarily should be accepted as sufficient. Lawyers should be
mindful of their obligations to both clients and the court under Rules 1.6 and
3.3.
Discharge
[4] A client has a right to discharge a lawyer at any time, with or without
cause, subject to liability for payment for the lawyer's services. Where future
dispute about the withdrawal may be anticipated, it may be advisable to prepare
a written statement reciting the circumstances.
[5] Whether a client can discharge appointed counsel may
depend on applicable law. A client seeking to do so should be given a full
explanation of the consequences. These consequences may include a decision by
the appointing authority that appointment of successor counsel is unjustified,
thus requiring self-representation by the client.
[6] If the client has severely diminished capacity, the client may lack the
legal capacity to discharge the lawyer, and in any event the discharge may be
seriously adverse to the client's interests. The lawyer should make special
effort to help the client consider the consequences and may take reasonably
necessary protective action as provided in Rule 1.14.
Optional Withdrawal
[7] A lawyer may withdraw from representation in some
circumstances. The lawyer has the option to withdraw if it can be accomplished
without material adverse effect on the client's interests. Forfeiture by the
client of a substantial financial investment in the representation may have
such effect on the client's interests. Withdrawal is also justified if the
client persists in a course of action that the lawyer reasonably believes is
criminal or fraudulent, for a lawyer is not required to be associated with such
conduct even if the lawyer does not further it. Withdrawal is also permitted if
the lawyer's services were misused in the past even if that would materially
prejudice the client. The lawyer may also withdraw where the client insists on
taking action that the lawyer considers repugnant or imprudent or with which
the lawyer has a fundamental disagreement.
[8] A lawyer may withdraw if the client refuses to abide by the terms of an
agreement relating to the representation, such as an agreement concerning fees
or court costs or an agreement limiting the objectives of the representation.
Assisting the Client upon Withdrawal
[9] Even if the lawyer has been unfairly discharged by
the client, a lawyer must take all reasonable steps to mitigate the
consequences to the client.
[10] The lawyer may never retain papers to secure a fee. Generally, anything in
the file that would be helpful to successor counsel should be turned over. This
includes papers and other things delivered to the discharged lawyer by the
client such as original instruments, correspondence, and canceled checks.
Copies of all correspondence received and generated by the withdrawing or
discharged lawyer should be released as well as legal instruments, pleadings,
and briefs submitted by either side or prepared and ready for submission. The
lawyer's personal notes and incomplete work product need not be released.
[11] A lawyer who represented an indigent on an appeal which has been concluded
and who obtained a trial transcript furnished by the state for use in preparing
the appeal, must turn over the transcript to the former client upon request,
the transcript being property to which the former client is entitled.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 3.
A client is entitled to his file upon withdrawal of his attorney.
CPR 24. Withdrawing partners and remaining partners should send clients a
common announcement of the firm's dissolution so that the client may elect whom
he wishes to handle his legal business.
CPR 61. It is improper for a senior member of a law firm who is employed to
represent a client to refer a case to a junior partner or associate without the
client's consent.
CPR 269. An attorney whose motion to withdraw from representation of a
corporation is denied must continue to represent the corporation.
CPR 315. An attorney must give an
indigent client the transcript provided by the state after disposition of the
appeal.
CPR 322. After completion of custody litigation, an attorney must release a
"home study" report to a client unless such is precluded by statute
or court order.
RPC 8. An attorney employed by an
insurer to represent an uninsured motorist may not withdraw after settlement
between insurer and the claimant until the court gives permission and the
attorney takes steps to minimize prejudice to his client.
RPC 48. Opinion outlines
professional responsibilities of lawyers involved in a law firm
dissolution.
RPC 58. Another member of a
lawyer's firm may substitute for the lawyer in defending a criminal case if
there is no prejudice to the client and the client and the court consent.
RPC 79. A lawyer who advances the
cost of obtaining medical records before deciding whether to accept a case may
not condition the release of the records to the client upon reimbursement of the
cost.
RPC 106. Opinion discusses
circumstances under which a refund of a prepaid fee is required.
RPC 153. In cases of multiple
representation, a lawyer who has been discharged by one client must deliver to
that client, as part of that client's file, information entrusted to the lawyer
by the other client.
RPC 157. A lawyer may seek the
appointment of a guardian for a client the lawyer believes to be incompetent
over the client's objection if reasonably necessary to protect the client's
interest.
RPC 158. Any portion of a sum of
money paid by a client in advance to secure payment of a fee that is unearned
at the time the lawyer is discharged must be refunded to the client.
RPC 169. A lawyer is not required to
provide a former client with copies of title notes and may charge a former
client for copies of documents from the client's file under certain
circumstances.
RPC 178. Opinion examines the
obligation to deliver the file to the client upon the termination of the
representation when a lawyer represents multiple clients in a single
matter.
RPC 223. When a lawyer's reasonable
attempts to locate a client are unsuccessful, the client's disappearance
constitutes a constructive discharge of the lawyer requiring the lawyer's
withdrawal from the representation.
RPC 227. A former residential real
estate client is not entitled to the lawyer's title notes or abstracts
regardless of whether such information is stored in the client's file. However,
a lawyer formerly associated with a firm may be entitled to examine the title
notes made by the lawyer to provide further representation to the same client.
RPC 234. An inactive client file may
be stored in an electronic format provided original documents with legal
significance are preserved and the documents in the electronic file can be
reproduced on paper.
RPC 245. A lawyer in possession of
the legal file relating to the prior representation of co-parties in an action
must provide the co-party the lawyer does not represent with access to the file
and a reasonable opportunity to copy the contents of the file.
98
Formal Ethics Opinion 9. Opinion rules that a lawyer
may charge a client the actual cost of retrieving a closed client file from
storage, subject to certain conditions, provided the lawyer does not withhold
the file to extract payment.
2002
Formal Ethics Opinion 5. Opinion rules that whether
electronic mail should be retained as a part of a client's file is a legal
decision to be made by the lawyer.
2005
Formal Ethics Opinion 13. Opinion rules that a
minimum fee that will be billed against at an hourly rate and is collected at
the beginning of representation belongs to the client and must be deposited
into the trust account until earned and, upon termination of representation,
the unearned portion of the fee must be returned to the client.
2006
Formal Ethics Opinion 18. When representation
is terminated by a client, a lawyer who advances the cost of a
deposition and transcript may not condition release of the transcript to the
client upon reimbursement of the cost.
2007
Formal Ethics Opinion 8. A lawyer may not charge a
client for filing and presenting a motion to withdraw unless withdrawal
advances the client's objectives for the representation or the charge is
approved by the court when ruling on a petition for legal fees from a
court-appointed lawyer.
2009
Formal Ethics Opinion 8. After the entry of the order
of sale in a partition proceeding, and before seeking the permission of the
clerk to withdraw from the representation to serve as the commissioner for the
sale, the lawyer must obtain the clientÕs informed consent, confirmed in writing,
to withdraw from the representation to serve as commissioner.
2010
Formal Ethics Opinion 1. A lawyer may
appear in a lawsuit on behalf of an insured whose whereabouts are unknown if
the insured has authorized the representation. However, if the insured cannot
thereafter be located, the lawyer may have to file a motion to withdraw.
CASE NOTES
Inadequate Notice of Withdrawal. - An attorney did not withdraw from
representation when he sent his client a letter stating that he believed he
could not handle the client's case and that the client should visit the office
for further discussion. North Carolina State Bar v. Sheffield , 73 N.C. App. 349, 326
S.E.2d 320, cert. denied , 474 U.S. 981, 106 S. Ct. 385, 88 L.
Ed. 2d. 338 (1985).
Duty of Attorney to Withdraw. - Where an attorney
learns, prior to trial, that his client intends to commit perjury or
participate in the perpetration of a fraud upon the court, he must withdraw
from representation of the client, seeking leave of the court, if necessary.
The right of a client to effective counsel in any case (civil or criminal) does
not include the right to compel counsel to knowingly assist or participate in
the commission of perjury or the creation or presentation of false
evidence. In re Palmer ,
296 N.C. 638, 252 S.E.2d 784 (1979).
Rule 1.17
Sale Of A Law Practice
A lawyer or
a law firm may sell or purchase a law practice, or an area of law practice,
including good will, if the following conditions are satisfied:
(a) The seller ceases to engage in the private practice of law, or in the area
of practice that has been sold, from an office that is within a one-hundred
(100) mile radius of the purchased law practice, except the seller may work for
the purchaser as an independent contractor and may provide legal representation
at no charge to indigent persons or to members of the sellerÕs family;
(b) The
entire practice, or the entire area of practice, is sold to one or more lawyers
or law firms;
(c) Written notice is sent to each of the seller's clients regarding:
(1) the
proposed sale, including the identity of the purchaser;
(2) the client's right to retain other counsel and to take possession of the
client's files prior to the sale or at any time thereafter; and
(3) the fact that the client's consent to the transfer of the client's files
and legal representation to the purchaser will be presumed if the client does
not take any action or does not otherwise object within thirty (30) days of
receipt of the notice.
(d) If the
seller or the purchaser identifies a conflict of interest that prohibits the
purchaser from representing the client, the seller's notice to the client shall
advise the client to retain substitute counsel.
(e) If a client cannot be given notice, the representation of that client may
be transferred to the purchaser only upon entry of an order so authorizing by a
court having jurisdiction. The seller may disclose to the court in camera
information relating to the representation only to the extent necessary to
obtain an order authorizing the transfer of a file. In the event the court
fails to grant a substitution of counsel in a matter, that matter shall not be
included in the sale and the sale otherwise shall be unaffected.
(f) The fees charged clients shall not be increased by
reason of the sale.
(g) The seller and purchaser may agree that the purchaser does not have to pay
the entire sales price for the seller's law practice in one lump sum. The
seller and purchaser may enter into reasonable arrangements to finance the
purchaser's acquisition of the seller's law practice without violating Rules
1.5(e) and 5.4(a). The seller, however, shall have no say regarding the
purchaser's conduct of the law practice.
Comment
[1] The practice of law is a profession, not merely a business. Clients are not
commodities that can be purchased and sold at will. Pursuant to this Rule, when
a lawyer or an entire firm ceases to practice and other lawyers or firms take
over the representation, the selling lawyer or firm may obtain compensation for
the reasonable value of the practice as may withdrawing
partners of law firms. See Rules 5.4 and 5.6.
Termination of Practice by the Seller
[2] The requirement that all of the private practice be sold is satisfied
if the seller in good faith makes the entire practice available for sale to the
purchasers. The fact that a number of the seller's clients decide not to be
represented by the purchasers but take their matters elsewhere, therefore, does
not result in a violation. Return to private practice as a result of an
unanticipated change in circumstances does not necessarily result in a
violation. For example, a lawyer who has sold the practice to accept an
appointment to judicial office does not violate the requirement that the sale
be attendant to cessation of practice if the lawyer later resumes private
practice upon being defeated in a contested or a retention election for the office.
[3] The
requirement that the seller cease to engage in the private practice of law does
not prohibit employment as an independent contract lawyer for the purchaser.
Permitting the seller to continue to work for the practice will assist in the
smooth transition of cases and will provide mentoring to new lawyers. The
requirement that the seller cease private practice also does not prohibit
employment as a lawyer on
the staff of a public agency or a legal services entity that provides legal
services to the poor, or as in-house counsel to a business. Similarly, the Rule
allows the seller to provide pro
bono representation to
indigent persons on his own initiative and to provide legal representation to
family members without charge.
[4] The Rule
permits a sale attendant upon discontinuing the private practice of law from an
office that is within a one-hundred (100) mile radius
of the purchased practice. Its provisions, therefore, accommodate the lawyer
who sells the practice upon the occasion of moving to another part of North Carolina or to another state.
Sale of Entire Practice or Entire Area of Practice
[5] The Rule requires that the seller's entire practice, or an entire area
of practice, be sold. The prohibition against sale of less than the entire practice
area protects those clients whose matters are less lucrative and who might find
it difficult to secure other counsel if a sale could be limited to substantial
fee-generating matters. The purchasers are required to undertake all client
matters in the practice or practice area, subject to client consent. This
requirement is satisfied, however, even if a purchaser is unable to undertake a
particular client matter because of a conflict of interest.
Client Confidences, Consent and Notice
[6] Written notice of the proposed sale must be sent to all clients who are
currently represented by the seller and to all former clients whose files will
be transferred to the purchaser. Although it is not required by this rule, the
placement of a notice of the proposed sale in a local newspaper of general
circulation would supplement the effort to provide notice to clients as
required by paragraph (c) of the rule.
[7] A lawyer or law firm ceasing to practice cannot be required to remain in
practice because some clients cannot be given actual notice of the proposed
purchase. Since these clients cannot themselves consent to the purchase or
direct any other disposition of their files, the Rule requires an order from a
court having jurisdiction authorizing their transfer or other disposition. The
Court can be expected to determine whether reasonable efforts to locate the
client have been exhausted, and whether the absent client's legitimate
interests will be served by authorizing the transfer of the file so that the
purchaser may continue the representation. Preservation of client confidences
requires that the petition for a court order be considered in camera.
[8] Negotiations between seller and prospective purchaser prior to disclosure
of information relating to a specific representation of an identifiable client
no more violate the confidentiality provisions of Rule 1.6 than do preliminary
discussions concerning the possible association of another lawyer or mergers
between firms, with respect to which client consent is not required. Providing
the purchaser access to client-specific information relating to the
representation and to the file, however, requires client consent. The Rule
provides that before such information can be disclosed by the seller to the
purchaser the client must be given actual written notice of the contemplated
sale, including the identity of the purchaser, and must be told that the
decision to consent or make other arrangements must be made within 30 days. If
nothing is heard from the client within that time, consent to the sale is
presumed.
[9] All the elements of client autonomy, including the client's absolute right
to discharge a lawyer and transfer the representation to another, survive the
sale of the practice. The notice to clients must advise clients that they have
a right to retain a lawyer other than the purchaser. In addition, the notice
must inform clients that their right to counsel of their choice continues after
the sale even though they consent to the transfer of the representation to the
purchaser.
Fee Arrangements Between Client and Purchaser
[10] The sale may not be financed by increases in
fees charged the clients of the practice. Existing agreements
between the seller and the client as to fees and the scope of the work must be
honored by the purchaser.
Other Applicable Ethical Standards
[11] Lawyers participating in the sale of a law practice are subject to the
ethical standards applicable to involving another lawyer in the representation
of a client. These include, for example, the seller's obligation to exercise
competence in identifying a purchaser qualified to assume the practice and the
purchaser's obligation to undertake the representation competently (see Rule 1.1); the obligation to avoid
disqualifying conflicts, and to secure the client's informed consent for those
conflicts that can be agreed to ( see Rule 1.7 regarding conflicts and Rule
1.0(f) for the definition of informed consent); and the obligation to protect
information relating to the representation (see Rules 1.6 and 1.9).
[12] If approval of the substitution of the purchasing lawyer for the selling
lawyer is required by the rules of any tribunal in which a matter is pending,
such approval must be obtained before the matter can be included in the sale
(see Rule 1.16).
Applicability of the Rule
[13] This Rule applies to the sale of a law practice by representatives of
a deceased, disabled or disappeared lawyer. Thus, the seller
may be represented by a non-lawyer representative not subject to these Rules.
Since, however, no lawyer may participate in a sale of a law practice which
does not conform to the requirements of this Rule, the representatives of the
seller as well as the purchasing lawyer can be expected to see to it that they
are met.
[14] Admission to or retirement from a law partnership or professional
association, retirement plans and similar arrangements, and a sale of tangible
assets of a law practice, do not constitute a sale or purchase governed by this
Rule.
[15] This Rule does not apply to the transfers of legal representation between
lawyers when such transfers are unrelated to the sale of a practice.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997
Amended
March 1, 2003; November 16, 2006
ETHICS OPINION NOTES
98 Formal Ethics
Opinion 6. Opinion rules that the requirements set forth
in Rule 1.17 relative to the sale of a law practice to a lawyer who is a
stranger to the firm do not apply to the sale of a law practice to lawyers who
are current employees of the firm.
Client-Lawyer Relationship
Rule 1.18
Duties to Prospective Client
(a) A person who discusses with a lawyer the possibility of
forming a client-lawyer relationship with respect to a matter is a prospective
client.
(b) Even when no client-lawyer relationship ensues, a lawyer who has had
discussions with a prospective client shall not use or reveal information
learned in the consultation, except as Rule 1.9 would
permit with respect to information of a former client.
(c) A lawyer subject to paragraph (b) shall not represent a client with
interests materially adverse to those of a prospective client in the same or a
substantially related matter if the lawyer received information from the
prospective client that could be significantly harmful to that person in the
matter, except as provided in paragraph (d). If a lawyer is disqualified from
representation under this paragraph, no lawyer in a firm with which that lawyer
is associated may knowingly undertake or continue representation in such a
matter, except as provided in paragraph (d).
(d) Representation is permissible if both the affected client and the
prospective client have given informed consent, confirmed in writing, or:
(1) the
disqualified lawyer is timely screened from any participation in the matter;
and
(2) written notice is promptly given to the prospective client.
Comment
[1] Prospective clients, like clients, may disclose information to a lawyer, place
documents or other property in the lawyer's custody, or rely on the lawyer's
advice. A lawyer's discussions with a prospective client usually are limited in
time and depth and leave both the prospective client and the lawyer free (and
sometimes required) to proceed no further. Hence, prospective clients should
receive some but not all of the protection afforded clients.
[2] Not all persons who communicate information to a lawyer are entitled to
protection under this Rule. A person who communicates information unilaterally
to a lawyer, without any reasonable expectation that the lawyer is willing to
discuss the possibility of forming a client-lawyer relationship, is not a
"prospective client" within the meaning of paragraph (a).
[3] It is often necessary for a prospective client to reveal information to the
lawyer during an initial consultation prior to the decision about formation of
a client-lawyer relationship. The lawyer often must learn such information to
determine whether there is a conflict of interest with an existing client and
whether the matter is one that the lawyer is willing to undertake. Paragraph
(b) prohibits the lawyer from using or revealing that information, except as
permitted by Rule 1.9, even if the client or lawyer decides not to proceed with
the representation. The duty exists regardless of how brief the initial
conference may be.
[4] In order to avoid acquiring disqualifying information from a prospective
client, a lawyer considering whether or not to undertake a new matter should
limit the initial interview to only such information as reasonably appears
necessary for that purpose. Where the information indicates that a conflict of
interest or other reason for non-representation exists, the lawyer should so
inform the prospective client or decline the representation. If the prospective
client wishes to retain the lawyer, and if consent is possible under Rule 1.7,
then consent from all affected present or former clients must be obtained
before accepting the representation.
[5] A lawyer may condition conversations with a prospective client on the
person's informed consent that no information disclosed during the consultation
will prohibit the lawyer from representing a different client in the matter.
See Rule 1.0(f) for the definition of informed consent. If the agreement
expressly so provides, the prospective client may also consent to the lawyer's
subsequent use of information received from the prospective client.
[6] Even in the absence of an agreement, under paragraph (c), the lawyer is not
prohibited from representing a client with interests adverse to those of the
prospective client in the same or a substantially related matter unless the
lawyer has received from the prospective client information that could be
significantly harmful if used in the matter.
[7] Under paragraph (c), the prohibition in this Rule is imputed to other
lawyers as provided in Rule 1.10, but, under paragraph (d), imputation may be
avoided if the lawyer obtains the informed consent, confirmed in writing, of
both the prospective and affected clients. In the alternative, imputation may
be avoided if all disqualified lawyers are timely screened and written notice
is promptly given to the prospective client. See Rule 1.0(l)
(requirements for screening procedures). Paragraph (d)(1) does not prohibit the
screened lawyer from receiving a salary or partnership share established by
prior independent agreement nor does it specifically prohibit the receipt of a
part of the fee from the screened matter. However, Rule 8.4(c) prohibits the
screened lawyer from participating in the fee if such participation was
impliedly or explicitly offered as an inducement to the lawyer to become
associated with the firm.
[8] Notice, including a description of the screened lawyer's prior
representation and of the screening procedures employed, generally should be
given as soon as practicable after the need for screening becomes apparent.
When disclosure is likely to significantly injure the client, a reasonable
delay may be justified.
[9] For the duty of competence of a lawyer who gives assistance on the merits
of a matter to a prospective client, see Rule 1.1. For a lawyer's duties when a
prospective client entrusts valuables or papers to the lawyer's care, see Rule
1.15. For the special considerations when a prospective client has diminished
capacity, see Rule 1.14.
History Note: Statutory Authority G. 84-23
Adopted March 1, 2003.
ETHICS OPINION NOTES
RPC 168.
Opinion rules that a lawyer may ask her client for a waiver of objection to a
possible future representation presenting a conflict of interest if certain
conditions are met.
RPC 244. Opinion rules that although
a lawyer asks a prospective client to sign a form stating that no client-lawyer
relationship will be created by reason of a free consultation with the lawyer,
the lawyer may not subsequently disclaim the creation of a client-lawyer
relationship and represent the opposing party.
RPC 246. Opinion rules that, under
certain circumstances, a lawyer may not represent a party whose interests are
opposed to the interests of a prospective client if confidential information of
the prospective client must be used in the representation.
2003
Formal Ethics Opinion 8. Opinion interprets various
provisions of Rule 1.18.
2006
Formal Ethics Opinion 14. Opinion rules that when a
lawyer charges a fee for a consultation, and the lawyer accepts payment, there
is a client-lawyer relationship for the purposes of the Rules of Professional
Conduct.
2011
Formal Ethics Opinion 8. Guidelines for the use of
live chat support services on law firm websites.
2011
Formal Ethics Opinion 10. A lawyer may advertise on a
website that offers daily discounts to consumers where the website companyÕs
compensation is a percentage of the amount paid to the lawyer if certain
disclosures are made and certain conditions are satisfied.
Client-Lawyer Relationship
Rule 1.19
Sexual Relations with Clients Prohibited
(a) A lawyer shall not have sexual relations with a current client
of the lawyer.
(b) Paragraph (a) shall not apply if a consensual sexual relationship existed
between the lawyer and the client before the legal representation commenced.
(c) A lawyer shall not require or demand sexual relations with a client incident
to or as a condition of any professional representation.
(d) For purposes of this rule, "sexual relations" means:
(1) Sexual intercourse; or
(2) Any touching of the sexual or other intimate parts of a person or causing
such person to touch the sexual or other intimate parts of the lawyer for the
purpose of arousing or gratifying the sexual desire of either party.
(e) For purposes of this rule, "lawyer" means any lawyer
who assists in the representation of the client but does not include other lawyers
in a firm who provide no such assistance.
Comment
[1] Rule 1.7, the general rule on conflict of interest, has always prohibited a
lawyer from representing a client when the lawyer's ability competently to
represent the client may be impaired by the lawyer's other personal or
professional commitments. Under the general rule on conflicts and the rule on
prohibited transactions (Rule 1.8), relationships with clients, whether
personal or financial, that affect a lawyer's ability to exercise his or her independent
professional judgment on behalf of a client are closely scrutinized. The rules
on conflict of interest have always prohibited the representation of a client
if a sexual relationship with the client presents a significant danger to the
lawyer's ability to represent the client adequately. The present rule clarifies
that a sexual relationship with a client is damaging to the client-lawyer
relationship and creates an impermissible conflict of interest that cannot be
ameliorated by the consent of the client.
Exploitation of the Lawyer's Fiduciary Position
[2] The relationship between a lawyer and client is a fiduciary
relationship in which the lawyer occupies the highest position of trust and
confidence. The relationship is also inherently unequal. The client comes to a
lawyer with a problem and puts his or her faith in the lawyer's special
knowledge, skills, and ability to solve the client's problem. The same factors
that led the client to place his or her trust and reliance in the lawyer also
have the potential to place the lawyer in a position of dominance and the
client in a position of vulnerability.
[3] A sexual relationship between a lawyer and a client may involve unfair
exploitation of the lawyer's fiduciary position. Because of the dependence that
so often characterizes the attorney-client relationship, there is a significant
possibility that a sexual relationship with a client resulted from the
exploitation of the lawyer's dominant position and influence. Moreover, if a
lawyer permits the otherwise benign and even recommended client reliance and
trust to become the catalyst for a sexual relationship with a client, the
lawyer violates one of the most basic ethical obligations; i.e., not to use the
trust of the client to the client's disadvantage. This same principle underlies
the rules prohibiting the use of client confidences to the disadvantage of the
client and the rules that seek to ensure that lawyers do not take financial
advantage of their clients. SeeRules 1.6 and 1.8.
Impairment of the Ability to Represent the Client Competently
[4] A lawyer must maintain his or her ability to represent a client
dispassionately and without impairment to the exercise of independent
professional judgment on behalf of the client. The existence of a sexual
relationship between lawyer and client, under the circumstances proscribed by
this rule, presents a significant danger that the lawyer's ability to represent
the client competently may be adversely affected because of the lawyer's
emotional involvement. This emotional involvement has the potential to undercut
the objective detachment that is demanded for adequate representation. A sexual
relationship also creates the risk that the lawyer will be subject to a
conflict of interest. For example, a lawyer who is sexually involved with his
or her client risks becoming an adverse witness to his or her own client in a
divorce action where there are issues of adultery and child custody to resolve.
Finally, a blurred line between the professional and personal relationship may
make it difficult to predict to what extent client confidences will be
protected by the attorney-client privilege in the law of evidence since client
confidences are protected by privilege only when they are imparted in the
context of the client-lawyer relationship.
No Prejudice to Client
[5] The prohibition upon representing a client with whom a sexual relationship
develops applies regardless of the absence of a showing of prejudice to the
client and regardless of whether the relationship is consensual.
Prior Consensual Relationship
[6] Sexual relationships that predate the client-lawyer relationship are not
prohibited. Issues relating to the exploitation of the fiduciary relationship
and client dependency are not present when the sexual relationship exists prior
to the commencement of the client-lawyer relationship. However, before
proceeding with the representation in these circumstances, the lawyer should be
confident that his or her ability to represent the client competently will not be impaired.
No Imputed Disqualification
[7] The other lawyers in a firm are not disqualified
from representing a client with whom the lawyer has become intimate. The
potential impairment of the lawyer's ability to exercise independent
professional judgment on behalf of the client with whom he or she is having a
sexual relationship is specific to that lawyer's representation of the client
and is unlikely to affect the ability of other members of the firm to
competently and dispassionately represent the client.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
Counselor
Rule 2.1 Advisor
In representing a client, a lawyer shall exercise independent,
professional judgment and render candid advice. In rendering advice, a lawyer
may refer not only to law, but also to other considerations such as moral,
economic, social, and political factors that may be relevant to the client's
situation.
Comment
Scope of Advice
[1] A client is entitled to straightforward advice
expressing the lawyer's honest assessment. Legal advice often involves
unpleasant facts and alternatives that a client may be disinclined to confront.
In presenting advice, a lawyer endeavors to sustain the client's morale and may
put advice in as acceptable a form as honesty permits. However, a lawyer should
not be deterred from giving candid advice by the prospect that the advice will
be unpalatable to the client.
[2] Advice couched in narrow legal terms may be of little value to a client,
especially where practical considerations such as cost or effects on other
people are predominant. Purely technical legal advice, therefore, can sometimes
be inadequate. It is proper for a lawyer to refer to relevant moral and ethical
considerations in giving advice. Although a lawyer is not a moral advisor as
such, moral and ethical considerations impinge upon most legal questions and
may decisively influence how the law will be applied.
[3] A client may expressly or impliedly ask the lawyer for purely technical
advice. When such a request is made by a client experienced
in legal matters, the lawyer may accept it at face value. When such a request is made by a client inexperienced in legal
matters, however, the lawyer's responsibility as advisor may include indicating
that more may be involved than strictly legal considerations.
[4] Matters that go beyond strictly legal questions may also be in the domain
of another profession. Family matters can involve problems within the
professional competence of psychiatry, clinical psychology, or social work;
business matters can involve problems within the competence of the accounting
profession or of financial specialists. Where consultation with a professional
in another field is itself something a competent lawyer would recommend, the
lawyer should make such a recommendation. At the same time, a lawyer's advice
at its best often consists of recommending a course of action in the face of
conflicting recommendations of experts.
Offering Advice
[5] In general, a lawyer is not expected to give advice until asked by the
client. However, when a lawyer knows that a client proposes a course of action
that is likely to result in substantial adverse legal consequences to the
client, the lawyer's duty to the client under Rule 1.4 may require that the
lawyer offer advice if the client's course of action is related to the
representation. Similarly, when a matter is likely to involve litigation, it
may be necessary under Rule 1.4 to inform the client of forms of dispute
resolution that might constitute reasonable alternatives to litigation. A
lawyer ordinarily has no duty to initiate investigation of a client's affairs
or to give advice that the client has indicated is unwanted, but a lawyer may
initiate advice to a client when doing so appears to be in the client's
interest.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
Counselor
Rule 2.2 Reserved
Counselor
Rule 2.3 Evaluation for Use by
Third Persons
(a) A lawyer may undertake an evaluation of a matter affecting a
client for the use of someone other than the client if:
(1) the
lawyer reasonably believes that making the evaluation is compatible with other
aspects of the lawyer's relationship with the client; and
(2) the client so requests or the client consents after consultation
(b) Except as disclosure is required in connection with a report
of an evaluation, information relating to the evaluation is otherwise protected
by Rule 1.6.
Comment
Definition
[1] An evaluation may be performed at the client's direction but for the
primary purpose of establishing information for the benefit of third parties;
for example, an opinion concerning the title of property rendered at the behest
of a vendor for the information of a prospective purchaser, or at the behest of
a borrower for the information of a prospective lender. In some situations, the
evaluation may be required by a government agency; for example, an opinion
concerning the legality of the securities registered for sale under the
securities laws. In other instances, the evaluation may be required by a third
person, such as a purchaser of a business.
[2] A legal evaluation should be distinguished from an investigation of a
person with whom the lawyer does not have a client-lawyer relationship. For
example, a lawyer retained by a purchaser to analyze a vendor's title to
property does not have a client-lawyer relationship with the vendor. So also,
an investigation into a person's affairs by a government lawyer, or by special
counsel by a government lawyer, or by special counsel employed by the
government, is not an evaluation as that term is used in this Rule. The
question is whether the lawyer is retained by the person
whose affairs are being examined. When the lawyer is
retained by that person, the general rules concerning loyalty to client
and preservation of confidences apply, which is not the case if the lawyer is
retained by someone else. For this reason, it is essential to identify the
person by whom the lawyer is retained. This should be made clear not only to
the person under examination, but also to others to whom the results are to be
made available.
Duty to Third Person
[3] When the evaluation is intended for the
information or use of a third person, a legal duty to that person may or may
not arise. That legal question is beyond the scope of this Rule. However, since
such an evaluation involves a departure from the normal client-lawyer
relationship, careful analysis of the situation is required. The lawyer must be
satisfied as a matter of professional judgment that making the evaluation is
compatible with other functions undertaken in behalf of the client. For
example, if the lawyer is acting as advocate in
defending the client against charges of fraud, it would normally be
incompatible with that responsibility for the lawyer to perform an evaluation
for others concerning the same or a related transaction. Assuming no such
impediment is apparent, however, the lawyer should advise the client of the
implications of the evaluation, particularly the lawyer's responsibilities to
third persons and the duty to disseminate the findings.
Access to and Disclosure of Information
[4] The quality of an evaluation depends on the freedom and extent of the
investigation upon which it is based. Ordinarily a lawyer should have whatever
latitude of investigation seems necessary as a matter of professional judgment.
Under some circumstances, however, the terms of the evaluation may be limited.
For example, certain issues or sources may be categorically excluded, or the
scope of search may be limited by time constraints or the noncooperation of
persons having relevant information. Any such limitations that are material to
the evaluation should be described in the report. If after a lawyer has
commenced an evaluation, the client refuses to comply with the terms upon which
it was understood the evaluation was to have been made, the
lawyer's obligations are determined by law, having reference to the terms of
the client's agreement and the surrounding circumstances.
Financial Auditors' Requests for Information
[5] When a question concerning the legal situation of a client arises at
the instance of the client's financial auditor and the question is referred to
the lawyer, the lawyer's response may be made in accordance with procedures
recognized in the legal profession. Such a procedure is set forth in the
American Bar Association Statement of Policy Regarding Lawyers' Responses to
Auditors' Requests for Information, adopted in 1975.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
Counselor
Rule 2.4 Lawyer Serving as
Third-Party Neutral
(a) A lawyer serves as a third-party neutral
when the lawyer assists two or more persons who are not clients of the lawyer
to reach a resolution of a dispute or other matter that has arisen between
them. Service as a third-party neutral may include service as an arbitrator, a
mediator or in such other capacity as will enable the lawyer to assist the
parties to resolve the matter.
(b) A lawyer serving as a third-party neutral shall inform unrepresented
parties that the lawyer is not representing them. When the lawyer knows or
reasonably should know that a party does not understand the lawyer's role in
the matter, the lawyer shall explain the difference between the lawyer's role
as a third-party neutral and a lawyer's role as one who represents a client.
Comment
[1] Alternative dispute resolution has become a substantial part of the civil
justice system. Aside from representing clients in dispute-resolution
processes, lawyers often serve as third-party neutrals. A third-party neutral
is a person, such as a mediator, arbitrator, conciliator or evaluator, who
assists the parties, represented or unrepresented, in the resolution of a
dispute or in the arrangement of a transaction. Whether a third-party neutral
serves primarily as a facilitator, evaluator or decisionmaker
depends on the particular process that is either selected by the parties or
mandated by a court.
[2] The role of a third-party neutral is not unique to lawyers, although, in
some court-connected contexts, only lawyers are allowed to serve in this role
or to handle certain types of cases. In performing this role, the lawyer may be
subject to court rules or other law that apply either to third-party neutrals
generally or to lawyers serving as third-party neutrals. Lawyer-neutrals may
also be subject to various codes of ethics, such as the Rules of the North
Carolina Supreme Court for the Dispute Resolution Commission and the North
Carolina Canons of Ethics for Arbitrators.
[3] Unlike nonlawyers who serve as third-party
neutrals, lawyers serving in this role may experience unique problems as a
result of differences between the role of a third-party neutral and a lawyer's
service as a client representative. The potential for confusion is significant
when the parties are unrepresented in the process. Thus, paragraph (b) requires
a lawyer-neutral to inform unrepresented parties that the lawyer is not
representing them. For some parties, particularly parties who frequently use
dispute-resolution processes, this information will be sufficient. For others, particularly
those who are using the process for the first time, more information will be
required. Where appropriate, the lawyer should inform unrepresented parties of
the important differences between the lawyer's role as third-party
neutral and a lawyer's role as a client representative, including the
inapplicability of the attorney-client evidentiary privilege. The extent of
disclosure required under this paragraph will depend on the particular parties
involved and the subject matter of the proceeding, as well as the particular
features of the dispute-resolution process selected.
[4] A lawyer who serves as a third-party neutral subsequently may be asked to
serve as a lawyer representing a client in the same matter. The conflicts of
interest that arise for both the individual lawyer and the lawyer's law firm
are addressed in Rule 1.12.
[5] Lawyers who represent clients in alternative dispute-resolution processes
are governed by the Rules of Professional Conduct. When the dispute-resolution
process takes place before a tribunal, as in binding arbitration ( see Rule 1.0(n)), the lawyer's duty of
candor is governed by Rule 3.3. Otherwise, the lawyer's duty
of candor toward both the third-party neutral and other parties is governed by
Rule 4.1.
History Note: Statutory Authority G. 84-23
Adopted March 1, 2003.
Advocate
Rule 3.1
Meritorious Claims and Contentions
A lawyer shall not bring or defend a proceeding, or assert or
controvert an issue therein, unless there is a basis in law and fact for doing
so that is not frivolous, which includes a good faith argument for an
extension, modification or reversal of existing law. A lawyer for the defendant
in a criminal proceeding, or the respondent in a proceeding that could result in
incarceration, may nevertheless so defend the proceeding as to require that
every element of the case be established.
Comment
[1] The advocate has a duty to use legal procedure for the fullest benefit of
the client's cause, but also a duty not to abuse legal procedure. The law, both
procedural and substantive, establishes the limits within which an advocate may
proceed. However, the law is not always clear and never is static. Accordingly,
in determining the proper scope of advocacy, account must be taken of the law's
ambiguities and potential for change.
[2] The filing of an action or defense or similar action
taken for a client is not frivolous merely because the facts have not first
been fully substantiated or because the lawyer expects to develop vital
evidence only by discovery. What is required of lawyers, however, is
that they inform themselves about the facts of their clients' cases and the
applicable law and determine that they can make good faith arguments in support
of their clients' positions. Such action is not frivolous even though the
lawyer believes that the client's position ultimately will not prevail. The
action is frivolous, however, if the lawyer is unable either to make a good
faith argument on the merits of the action taken or to support the action taken
by a good faith argument for an extension, modification or reversal of existing
law.
[3] The lawyer's obligations under this Rule are subordinate to federal or
state constitutional law that entitles a defendant in a criminal matter to the
assistance of counsel in presenting a claim that otherwise would be prohibited
by this Rule.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 122. An attorney representing the defendant in divorce action, when
advised by the client that parties have not been separated a year, must file an
answer denying the allegation of separation even though the client does not
wish to contest the divorce.
CPR 321. It is improper for an attorney to file motions and pleadings for the
mere purpose of delay.
2011
Formal Ethics Opinion 3. A criminal defense lawyer
may advise an undocumented alien that deportation may result in avoidance of a
criminal conviction and may file a notice of appeal to superior court although
there is a possibility that client will be deported.
Advocate
Rule 3.2
Expediting Litigation
A lawyer shall make reasonable efforts to expedite litigation
consistent with the interests of the client.
Comment
[1] Dilatory practices bring the administration of justice into disrepute.
Although there will be occasions when a lawyer may properly seek a postponement
for personal reasons, it is not proper for a lawyer to routinely fail to
expedite litigation solely for the convenience of the advocates. Nor will a
failure to expedite be reasonable if done for the purpose of frustrating an
opposing party's attempt to obtain rightful redress or repose. It is not a
justification that similar conduct is often tolerated by the
bench and bar. The question is whether a competent lawyer acting in good
faith would regard the course of action as having some substantial purpose
other than delay. Realizing financial or other benefit from otherwise improper
delay in litigation is not a legitimate interest of the client.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 321. It is improper for an attorney to file motions and pleadings
for the mere purpose of delay.
Advocate
Rule 3.3 Candor Toward the Tribunal
(a) A lawyer shall not knowingly:
(1) make
a false statement of material fact or law to a tribunal or fail to correct a
false statement of material fact or law previously made to the tribunal by the
lawyer;
(2) fail to disclose to the tribunal legal authority in the controlling
jurisdiction known to the lawyer to be directly adverse to the position of the
client and not disclosed by opposing counsel; or
(3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer's
client, or a witness called by the lawyer, has offered material evidence and
the lawyer comes to know of its falsity, the lawyer shall take reasonable
remedial measures, including, if necessary, disclosure to the tribunal. A
lawyer may refuse to offer evidence, other than the testimony of a defendant in
a criminal matter, that the lawyer reasonably believes
is false.
(b) A lawyer who represents a client in an adjudicative proceeding
and who knows that a person intends to engage, is engaging or has engaged in
criminal or fraudulent conduct related to the proceeding shall take reasonable
remedial measures, including, if necessary, disclosure to the tribunal.
(c) The duties stated in paragraphs (a) and (b) continue to the conclusion of
the proceeding, and apply even if compliance requires disclosure of information
otherwise protected by Rule 1.6.
(d) In an ex parte proceeding, a lawyer shall inform the tribunal of all
material facts known to the lawyer that will enable the tribunal to make an
informed decision, whether or not the facts are adverse.
Comment
[1] This Rule governs the conduct of a lawyer who is representing a client in
the proceedings of a tribunal. See Rule 1.0(n) for the
definition of "tribunal." It also applies when the lawyer is
representing a client in an ancillary proceeding conducted pursuant to the
tribunal's adjudicative authority, such as a deposition. Thus, for example,
paragraph (a)(3) requires a lawyer to take reasonable remedial measures if the
lawyer comes to know that a client who is testifying in a deposition has
offered evidence that is false.
[2] This Rule sets forth the special duties of lawyers as officers of the court
to avoid conduct that undermines the integrity of the adjudicative process. A
lawyer acting as an advocate in an adjudicative proceeding has an obligation to
present the client's case with persuasive force. Performance of that duty while
maintaining confidences of the client, however, is qualified by the advocate's
duty of candor to the tribunal. Consequently, although a lawyer in an
adjudicative proceeding is not required to present an impartial exposition of
the law or to vouch for the evidence submitted in a cause, the lawyer must not
allow the tribunal to be misled by false statements of material fact or law or
evidence that the lawyer knows to be false.
Representations by a Lawyer
[3] An advocate is responsible for pleadings and other documents prepared
for litigation, but is usually not required to have personal knowledge of
matters asserted therein, for litigation documents ordinarily present
assertions by the client, or by someone on the client's behalf, and not
assertions by the lawyer. Compare Rule 3.1. However, an
assertion purporting to be on the lawyer's own knowledge, as in an affidavit by
the lawyer or in a statement in open court, may properly be made only when the
lawyer knows the assertion is true or believes it to be true on the basis of a
reasonably diligent inquiry. There are circumstances where failure to make a
disclosure is the equivalent of an affirmative misrepresentation. The
obligation prescribed in Rule 1.2(d) not to counsel a client to commit or
assist the client in committing a fraud applies in litigation. Regarding
compliance with Rule 1.2(d), see the Comment to that Rule. See also Rule
8.4(b), Comment.
Legal Argument
[4] Legal argument based on a knowingly false representation of law constitutes
dishonesty toward the tribunal. A lawyer is not required to make a
disinterested exposition of the law, but must recognize the existence of
pertinent legal authorities. Furthermore, as stated in paragraph (a)(2), an
advocate has a duty to disclose directly adverse authority in the controlling
jurisdiction that has not been disclosed by the opposing party. The underlying
concept is that legal argument is a discussion seeking to determine the legal
premises properly applicable to the case.
Offering Evidence
[5] Paragraph (a)(3) requires that the lawyer refuse to offer evidence that the
lawyer knows to be false, regardless of the client's wishes. This duty is
premised on the lawyer's obligation as an officer of the court to prevent the
trier of fact from being misled by false evidence. A lawyer does not violate
this Rule if the lawyer offers the evidence for the purpose of establishing its
falsity.
[6] If a lawyer knows that the client intends to testify falsely or wants the
lawyer to introduce false evidence, the lawyer should seek to persuade the
client that the evidence should not be offered. If the persuasion is
ineffective and the lawyer continues to represent the client, the lawyer must
refuse to offer the false evidence. If only a portion of a witness's testimony
will be false, the lawyer may call the witness to testify but may not elicit or
otherwise permit the witness to present the testimony that the lawyer knows is
false.
[7] The duties stated in paragraphs (a) and (b) apply
to all lawyers, including defense counsel in criminal cases. See Comment
[9].
[8] The prohibition against offering false evidence only applies if the lawyer
knows that the evidence is false. A lawyer's reasonable belief that evidence is
false does not preclude its presentation to the trier of fact. A lawyer's
knowledge that evidence is false, however, can be inferred from the
circumstances. See Rule 1.0(g). Thus, although a lawyer should
resolve doubts about the veracity of testimony or other evidence in favor of
the client, the lawyer cannot ignore an obvious falsehood.
[9] Although paragraph (a)(3) only prohibits a lawyer from offering evidence
the lawyer knows to be false, it permits the lawyer to refuse to offer
testimony or other proof that the lawyer reasonably believes is false. Offering
such proof may reflect adversely on the lawyer's ability to discriminate in the
quality of evidence and thus impair the lawyer's effectiveness as an advocate.
Because of the special protections historically provided criminal defendants,
however, this Rule does not permit a lawyer to refuse to offer the testimony of
such a client where the lawyer reasonably believes but does not know that the
testimony will be false. Unless the lawyer knows the testimony will be false,
the lawyer must honor the client's decision to testify. See alsoComment [7].
Remedial Measures
[10] Having offered material evidence in the
belief that it was true, a lawyer may subsequently come to know that the
evidence is false. Or, a lawyer may be surprised when the lawyer's client, or
another witness called by the lawyer, offers testimony the lawyer knows to be
false, either during the lawyer's direct examination or in response to
cross-examination by the opposing lawyer. In such situations or if the lawyer
knows of the falsity of testimony elicited from the client during a deposition,
the lawyer must take reasonable remedial measures. The lawyer's action must
also be seasonable: depending upon the circumstances, reasonable remedial
measures do not have to be undertaken immediately, however, the lawyer must act
before a third party relies to his or her detriment upon the false testimony or
evidence. The advocate's proper course is to remonstrate with the client
confidentially, advise the client of the lawyer's duty of candor to the
tribunal and seek the client's cooperation with respect to the withdrawal or
correction of the false statements or evidence. If that fails, the advocate
should seek to withdraw if that will remedy the situation. If withdrawal from
the representation is not permitted or will not undo the effect of the false
evidence, the advocate's only option may be to make such disclosure to the
tribunal as is reasonably necessary to remedy the situation, even if doing so
requires the lawyer to reveal information that otherwise would be protected by
Rule 1.6. It is for the tribunal then to determine what should be done - making
a statement about the matter to the trier of fact, ordering a mistrial or
perhaps nothing.
[11] The disclosure of a client's false testimony can result in grave
consequences to the client, including not only a sense of betrayal but also
loss of the case and perhaps a prosecution for perjury. But the alternative is
that the lawyer cooperate in deceiving the court,
thereby subverting the truth-finding process which the adversary system is
designed to implement. SeeRule 1.2(d). Furthermore, unless it is clearly understood that
the lawyer will act upon the duty to disclose the existence of false evidence,
the client can simply reject the lawyer's advice to reveal the false evidence
and insist that the lawyer keep silent. Thus the client could in effect coerce
the lawyer into being a party to fraud on the court.
Preserving Integrity of Adjudicative Process
[12] Lawyers have a special obligation to protect a tribunal against
criminal or fraudulent conduct that undermines the integrity of the
adjudicative process, such as bribing, intimidating or otherwise unlawfully
communicating with a witness, juror, court official or other participant in the
proceeding, unlawfully destroying or concealing documents or other evidence or
failing to disclose information to the tribunal when required by law to do so.
Thus, paragraph (b) requires a lawyer to take reasonable remedial measures,
including disclosure if necessary, whenever the lawyer knows that a person,
including the lawyer's client, intends to engage, is engaging or has engaged in
criminal or fraudulent conduct related to the proceeding.
[13] The general rule that an advocate must reveal the existence of perjury
with respect to a material fact-even that of a client-applies to defense
counsel in criminal cases, as well as in other instances. However, the definition of the lawyer's ethical duty in such a situation may
be qualified by constitutional provisions for due process and the right to
counsel in criminal cases. These provisions have been construed to
require that counsel present an accused as a witness if the accused wishes to
testify, even if counsel knows the testimony will be false. The obligation of
the advocate under these Rules is subordinate to such a constitutional
requirement.
Duration of Obligation
[14] A practical time limit on the obligation to
rectify false evidence or false statements of material fact or law has to be
established. The conclusion of the proceeding is a reasonably definite point
for the termination of the obligation. A proceeding has concluded within the
meaning of this Rule when no matters in the proceeding are still pending before
the tribunal or the proceeding has concluded pursuant to the rules of the
tribunal such as when a final judgment in the proceeding is affirmed on appeal,
a bankruptcy case is closed, or the time for review has passed.
Ex Parte Proceedings
[15] Ordinarily, an advocate has the limited responsibility of presenting
one side of the matters that a tribunal should consider in reaching a decision;
the conflicting position is expected to be presented
by the opposing party. However, in any ex parte proceeding, such as an
application for a temporary restraining order, there is no balance of
presentation by opposing advocates. The object of an ex parte proceeding is
nevertheless to yield a substantially just result. The judge has an affirmative
responsibility to accord the absent party just consideration. The lawyer for
the represented party has the correlative duty to make disclosures of material
facts known to the lawyer and that the lawyer reasonably believes are necessary
to an informed decision.
Withdrawal
[16] Normally, a lawyer's compliance with the duty of candor imposed by this
Rule does not require that the lawyer withdraw from the representation of a
client whose interests will be or have been adversely affected by the lawyer's
disclosure. The lawyer may, however, be required by Rule 1.16(a) to seek
permission of the tribunal to withdraw if the lawyer's compliance with this
Rule's duty of candor results in such an extreme deterioration of the
client-lawyer relationship that the lawyer can no longer competently represent
the client. Also see Rule 1.16(b) for the circumstances in which a lawyer will
be permitted to seek a tribunal's permission to withdraw. In connection with a
request for permission to withdraw that is premised on a client's misconduct, a
lawyer may reveal information relating to the representation only to the extent
reasonably necessary to comply with this Rule or as otherwise permitted by Rule
1.6.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 92. An attorney who knows that criminal clients gave arresting
officers fictitious names should call upon the clients to disclose their true
identities to the court and, if they refuse, seek to withdraw. ( See also Rule 3.3(a)(3))
CPR 122. An attorney representing the defendant in divorce action, when advised
by the client that parties have not been separated a year, must file an answer
denying the allegation of separation even though the client does not wish to
contest the divorce.
CPR 284. An attorney may seek alimony for a wife although he has evidence of
the wife's adultery so long as he does not have to offer perjured testimony or
other false evidence.
RPC 33. If an attorney's client
testifies falsely regarding a material matter, such as his or her name or
criminal record, the attorney must call upon the client to correct the
testimony. If the client refuses, the attorney must seek to withdraw in
accordance with the rules of the tribunal. (See also Rule
3.3(a)(3))
RPC 203. Dismissal of an action
alone is not sufficient to rectify the perjury of a client in a deposition and
the lawyer must demand that the client inform the opposing party of the falsity
of the deposition testimony or, if the client refuses, withdraw from the
representation. ( See alsoRule
3.3(a)(3))
98 Formal Ethics Opinion 1. Opinion rules that a lawyer
representing a client in a social security disability hearing is not required
to inform the administrative law judge of material adverse facts known to the
lawyer.
98
Formal Ethics Opinion 5. Opinion rules that a defense
lawyer may remain silent while the prosecutor presents an inaccurate driving
record to the court provided the lawyer and client did not criminally or
fraudulently misrepresent the driving record to the prosecutor or the court,
and further provided, that on application for a limited driving privilege,
there is no misrepresentation to the court about the client's prior driving
record.
98
Formal Ethics Opinion 20. Opinion rules that, subject
to a statute prohibiting the withholding of the information, a lawyer's duty to
disclose confidential client information to a bankruptcy court ends when the
case is closed although the debtor's duty to report new property continues for
180 days after the date of filing the petition.
99
Formal Ethics Opinion 16. Opinion rules that a lawyer
may not participate in the presentation of a consent judgment to a court if the
lawyer knows that the consent judgment is based upon false information.
2001
Formal Ethics Opinion 1. Opinion rules that, in a
petition to a court for an award of an attorney's fee, a lawyer must disclose
that the client paid a discounted hourly rate for legal services as a result of
the client's membership in a prepaid or group legal services plan.
2003
Formal Ethics Opinion 5. Opinion rules that neither a
defense lawyer nor a prosecutor may participate in the misrepresentation of a
criminal defendant's prior record level in a sentencing proceeding even if the
judge is advised of the misrepresentation and does not object.
2008
Formal Ethics Opinion 1. A lawyer representing an
undocumented worker in a workers' compensation action has a duty to correct
court documents containing false statements of material fact and is prohibited
from introducing evidence in support of the proposition that an alias is the
client's legal name.
2008
Formal Ethics Opinion 3. A lawyer may assist a pro se
litigant by drafting pleadings and giving advice without making an appearance
in the proceeding and without disclosing or ensuring the disclosure of his
assistance to the court unless required to do so by law or court order.
2010
Formal Ethics Opinion 1. A lawyer may
appear in a lawsuit on behalf of an insured whose whereabouts are unknown if
the insured has authorized the representation. However, if the insured cannot
thereafter be located, the lawyer may not mislead the court about the insured's
absence.
2011
Formal Ethics Opinion 3. A criminal defense lawyer
may advise an undocumented alien that deportation may result in avoidance of a
criminal conviction and may file a notice of appeal to superior court although
there is a possibility that client will be deported.
2011
Formal Ethics Opinion 12. A lawyer must notify the
court when a clerk of court mistakenly dismisses a clientÕs charges.
CASE NOTES
Preparation of Witness. - It is not improper for an attorney to prepare
his witness for trial, to explain the applicable law in any given situation and
to go over before trial the attorney's questions and the witness' answers so
that the witness will be ready for his appearance in court, will be more at
ease because he knows what to expect, and will give his testimony in the most
effective manner he can. Such preparation is the mark of a good trial lawyer,
and is to be commended because it promotes more efficient administration of
justice and saves court time. Nothing improper occurs so long as the attorney
prepares the witness to give the witness' testimony at trial and not the
testimony that the attorney has placed in the witness' mouth or false or
perjured testimony. State v. McCormick , 298 N.C. 788, 259 S.E.2d
880 (1979).
Client Perjury. - Where an attorney learns, prior to trial, that his client
intends to commit perjury or participate in the perpetration of a fraud upon
the court he must withdraw from representation of the client, seeking leave of
the court, if necessary. The right of a client to effective counsel in any case
(civil or criminal) does not include the right to compel counsel knowingly to
assist or participate in the commission of perjury or the creation or
presentation of false evidence. In re Palmer , 296 N.C. 638, 252 S.E.2d
784 (1979).
Concealment of Material Facts. - Intentionally
encouraging the concealment of material facts relevant to the identity of the
driver in a driving under the influence prosecution is prejudicial to the
administration of justice. Such conduct raises serious doubts as to the
attorney's desire to bring about a just result in such a prosecution and
adversely reflects on the attorney's fitness to practice law. North
Carolina State Bar v. Graves , 50 N.C. App. 450, 274 S.E.2d 396
(1981).
Failure to Inform Court of Opposing Party's Address. -
An attorney clearly engaged in conduct involving fraud, dishonesty, deceit and
misrepresentation when, in a divorce action, she failed to inform the court of
a letter which contained the opposing party's return address, while at the same
time presenting to the court an affidavit she had drafted in which her client
swore that her husband's whereabouts were unknown and could not with due
diligence be ascertained. North Carolina State Bar v. Wilson , 74
N.C. App. 777, 330 S.E.2d 280 (1985).
Quoted in Brooks v. Wal-Mart Stores, Inc. , 139 N.C. App. 637, 535
S.E.2d 55 (2000).
Advocate
Rule 3.4 Fairness
to Opposing Party and Counsel
A lawyer shall not:
(a) unlawfully obstruct another party's access to evidence or unlawfully alter,
destroy or conceal a document or other material having potential evidentiary
value. A lawyer shall not counsel or assist another person to do any such act;
(b) falsify evidence, counsel or assist a witness to testify falsely, counsel
or assist a witness to hide or leave the jurisdiction for the purpose of being
unavailable as a witness, or offer an inducement to a witness that is
prohibited by law;
(c) knowingly disobey or advise a client or any other person to disobey an
obligation under the rules of a tribunal, except a lawyer acting in good faith
may take appropriate steps to test the validity of such an obligation;
(d) in pretrial procedure,
(1) make
a frivolous discovery request,
(2) fail to make a reasonably diligent effort to
comply with a legally proper discovery request by an opposing party, or
(3) fail to disclose evidence or information that the
lawyer knew, or reasonably should have known, was subject to disclosure under
applicable law, rules of procedure or evidence, or court opinions;
(e) in trial, allude to any matter that the lawyer
does not reasonably believe is relevant or that will not be supported by
admissible evidence, assert personal knowledge of facts in issue except when
testifying as a witness, ask an irrelevant question that is intended to degrade
a witness, or state a personal opinion as to the justness of a cause, the
credibility of a witness, the culpability of a civil litigant, or the guilt or
innocence of an accused; or
(f) request a person other than a client to refrain from voluntarily giving
relevant information to another party unless:
(1) the
person is a relative or a managerial employee or other agent of a client; and
(2) the lawyer reasonably believes that the person's interests will not be
adversely affected by refraining from giving such information.
Comment
[1] The procedure of the adversary system contemplates that the evidence in a
case is to be marshaled competitively by the contending parties. Fair
competition in the adversary system is secured by prohibitions against
destruction or concealment of evidence, improperly influencing witnesses,
obstructive tactics in discovery procedure, and the like.
[2] Documents and other items of evidence are often essential to establish a
claim or defense. Subject to evidentiary privileges, the right of an opposing
party, including the government, to obtain evidence through discovery or
subpoena is an important procedural right. The exercise of that right can be
frustrated if relevant material is altered, concealed or destroyed. Applicable
law in many jurisdictions makes it an offense to destroy material for the
purpose of impairing its availability in a pending proceeding or one whose commencement
can be foreseen. Falsifying evidence is also generally a criminal offense.
Paragraph (a) applies to evidentiary material generally, including computerized
information. Applicable law may permit a lawyer to take temporary possession of
physical evidence of client crimes for the purpose of conducting a limited
examination that will not alter or destroy material characteristics of the
evidence. In such a case, applicable law may require the lawyer to turn the
evidence over to the police or other prosecuting authority, depending on the
circumstances.
[3] With regard to paragraph (b), it is not improper to pay a witness's
expenses, including lost income, or to compensate an expert witness on terms
permitted by law. The common law rule in most jurisdictions is that it is
improper to pay an occurrence witness any fee for testifying and that it is
improper to pay an expert witness a contingent fee.
[4] Rules of evidence and procedure are designed to lead to just decisions and
are part of the framework of the law. Paragraph (c) permits a lawyer to take
steps in good faith and within the framework of the law to test the validity of
rules; however, the lawyer is not justified in consciously violating such rules
and the lawyer should be diligent in the effort to guard against the
unintentional violation of them. As examples, a lawyer should subscribe to or
verify only those pleadings that the lawyer believes are in compliance with
applicable law and rules; a lawyer should not make any prefatory statement
before a tribunal in regard to the purported facts of the case on trial unless
the lawyer believes that the statement will be supported by admissible
evidence; a lawyer should not ask a witness a question solely for the purpose
of harassing or embarrassing the witness; and a lawyer should not, by
subterfuge, put before a jury matters which it cannot properly consider.
[5] Paragraph (d) makes it clear that a lawyer must be reasonably
diligent in making inquiry of the client, or third party, about information or
documents responsive to discovery requests or disclosure requirements arising
from statutory law, rules of procedure, or caselaw.
"Reasonably" is defined in Rule 0.1, Terminology, as
meaning "conduct of a reasonably prudent and competent lawyer." Rule 0.1(i). When responding to a
discovery request or disclosure requirement, a lawyer must act in good faith.
The lawyer should impress upon the client the importance of making a thorough
search of the clientÕs records and responding honestly. If the lawyer has reason
to believe that a client has not been forthcoming, the lawyer may not rely
solely upon the clientÕs assertion that the response is truthful or complete.
[6] To bring about just and informed decisions,
evidentiary and procedural rules have been established by tribunals to permit
the inclusion of relevant evidence and argument and the exclusion of all other
considerations. The expression by a lawyer of a personal opinion as to
the justness of a cause, as to the credibility of a witness, as to the culpability
of a civil litigant, and as to the guilt or innocence of an accused is not a
proper subject for argument to the trier of fact and is prohibited by paragraph
(e). However, a lawyer may argue, on an analysis of the evidence, for any
position or conclusion with respect to any of the foregoing matters.
[7] Paragraph (f) permits a lawyer to advise managerial employees of a client
to refrain from giving information to another party because the statements of
employees with managerial responsibility may be imputed to the client. See
also Rule 4.2.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997
Amended
March 1, 2003;
October 1, 2003; November 16, 2006
ETHICS OPINION NOTES
CPR 2. An attorney generally does
not need the consent of the adverse party to talk to witnesses.
CPR 284. An attorney may seek alimony for a wife although he has evidence of
the wife's adultery so long as he does not have to offer perjured testimony or
other false evidence.
CPR 340. An attorney may represent a client with a malpractice claim even
though the client has entered a contingent fee contract with a medical
consultant for case evaluation, preparation and expert witness location, so
long as the consultant does not present evidence and the compensation of the
expert witness provided by the consultant is not contingent upon the outcome of
the litigation.
RPC 225. The lawyer for a defendant
in criminal and civil actions arising out of the same event may seek the
cooperation of a crime victim on a plea agreement provided the settlement of
the victim's civil claim against the defendant is not contingent upon the
content of the testimony of the victim or the outcome of the case.
2008
Formal Ethics Opinion 15. Provided the agreement does
not constitute the criminal offense of compounding a crime and is not otherwise
illegal, and does not contemplate the fabrication, concealment, or destruction
of evidence, a lawyer may participate in a settlement agreement of a civil
claim that includes a non-reporting provision prohibiting the plaintiff from
reporting the defendant's conduct to law enforcement authorities.
2009
Formal Ethics Opinion 7. A criminal defense
lawyer or a prosecutor may not interview a child who is the alleged victim in a
criminal case alleging physical or sexual abuse if the child is younger than
the age of maturity as determined by the General Assembly for the purpose of an
in-custody interrogation (currently age fourteen) unless the lawyer has the
consent of a non-accused
parent or guardian or a court order allows the lawyer to seek an interview with
the child without such consent; a lawyer may interview a child who is this
age or older without such consent or authorization provided the lawyer complies
with Rule 4.3, reasonably determines that the child is sufficiently mature to
understand the lawyerÕs role and purpose, and avoids any conduct designed to coerce
or intimidate the child.
CASE NOTES
Interjection of Personal Opinion. - Counsel may not, by argument or cross-examination,
place before the jury incompetent and prejudicial matters by injecting his own
knowledge, beliefs and personal opinions not supported by the evidence. State
v. Locklear ,
294 N.C. 210, 241 S.E.2d 65 (1978).
Interjection of Unsupported Knowledge and Belief. -
Counsel may not, by agreement or cross-examination, place before the jury
incompetent and prejudicial matters by injecting his own knowledge, beliefs and
personal opinions not supported by the evidence. State v. Locklear, 294
N.C. 210, 241 S.E.2d 65 (1978).
Preparation of Witness. - It is not improper for an
attorney to prepare his witness for trial, to explain the applicable law in any
given situation and to go over before trial the attorney's questions and the
witness' answers so that the witness will be ready for his appearance in court,
will be more at ease because he knows what to expect, and will give his
testimony in the most effective manner he can. Such preparation is the mark of
a good trial lawyer, and is to be commended because it promotes more efficient
administration of justice and saves court time. Nothing improper occurs so long
as the attorney prepares the witness to give the witness' testimony at trial
and not the testimony that the attorney has placed in the witness' mouth or
false or perjured testimony. State v. McCormick , 298 N.C. 788, 259 S.E.2d
880 (1979).
Informing a potential witness to plead the U.S. Const., Amend. V or to stay
away from court unless subpoenaed is not unethical. Certainly no rule prevents
an attorney from informing a potential witness of his legal rights. North
Carolina State Bar v. Graves , 50 N.C. App. 450, 274 S.E.2d 396
(1981).
Ethical transgressions by trial counsel do not always constitute legal
error. State v. Sanders ,
303 N.C. 608, 281 S.E.2d 7, cert. denied ,
454 U.S. 973, 102 S. Ct. 523, 70 L. Ed. 2d. 392
(1981).
Argument Containing Personal Belief. - The defendant
contended on appeal that the prosecutor's argument to the jury contained the
prosecutor's personal belief as to the defendant's guilt in violation of the
Code. The court held that the statements could be interpreted in several ways,
but that even if the prosecutor's argument had contained such a statement, the
violation did not entitle the defendant to a new trial. State v. Sanders ,
303 N.C. 608, 281 S.E.2d 7, cert. denied ,
454 U.S. 973, 102 S. Ct. 523, 70 L. Ed. 2d 392 (1981).
Argument That Testifying Officers Could Be Prosecuted If They
Lied. - A prosecutor who, in closing, made arguments based on matters
outside the record by suggesting that the officers who testified against the
defendant could be prosecuted for perjury and fired from their jobs, and lose
their pensions if they lied, placed the jurors in the moral dilemma of either
convicting the defendant or, in the alternative, causing the officers to suffer
the grievous penalties suggested by the prosecutor. The argument was,
therefore, improper and the defendant was entitled to a new trial. State
v. Potter ,
69 N.C. App. 199, 316 S.E.2d 359, disc. rev.
denied , 312 N.C. 624, 323 S.E.2d 925 (1984).
Failure to Inform Court of Opposing Party's Address. -
An attorney clearly engaged in conduct involving fraud, dishonesty, deceit and
misrepresentation when, in a divorce action, she failed to inform the court of
a letter which contained the opposing party's return address, while at the same
time presenting to the court an affidavit she had drafted in which her client
swore that her husband's whereabouts were unknown and could not with due
diligence be ascertained. North Carolina State Bar v.
Wilson, 74 N.C. App. 777, 330 S.E.2d 280 (1985).
Interference with Prosecuting Witness. - Immediately
prior to trial, the defense attorney negotiated an agreement between the
prosecuting witness and the accused which called for
his client to pay for damages to the witness' car and the witness' hospital
bills in return for a promise not to press charges. He also told the witness
she could leave the courthouse because her testimony would not be needed. The
defendant attorney's efforts on behalf of his client went far beyond
representing the client "zealously within the bounds of the law" and
constituted a direct attempt to interfere with a State's witness who was under
subpoena to testify in a named case.State
v. Rogers , 68 N.C. App. 358, 315 S.E.2d 492, cert. denied ,
311 N.C. 767, 319 S.E.2d 284 (1984), appeal dismissed ,
469 U.S. 1101, 105 S. Ct. 769, 83 L. Ed. 2d 766 (1985).
Prosecutor's questioning of capital murder defendant's mother about locks
placed on the outside of defendant's bedroom door was highly prejudicial and of
no probative value; however, such error was harmless where the question of
defendant's guilt was strong, the trial court properly sustained defendant's
objections to the questions, and the mother testified that she was not afraid
of her son. State v. Payne, 328 N.C. 377, 402 S.E.2d 582
(1991).
Advocate
Rule 3.5
Impartiality and Decorum
of the Tribunal
(a) A lawyer shall not:
(1) seek
to influence a judge, juror, prospective juror, or other official by means
prohibited by law;
(2) communicate ex parte with a juror or prospective juror
except as permitted by law;
(3) communicate ex parte with a judge or other official
except:
(A) in
the course of official proceedings;
(B) in writing, if a copy of the writing is furnished simultaneously to the
opposing party;
(C) orally, upon adequate notice to opposing party; or
(D) as otherwise permitted by law;
(4) engage
in conduct intended to disrupt a tribunal, including:
(A) failing
to comply with known local customs of courtesy or practice of the bar or a
particular tribunal without giving opposing counsel timely notice of the intent
not to comply;
(B) engaging in undignified or discourteous conduct that is degrading to a tribunal;
or
(C) intentionally or habitually violating any established rule of procedure or
evidence; or
(5) communicate
with a juror or prospective juror after discharge of the jury if:
(A) the
communication is prohibited by law or court order;
(B) the juror has made known to the lawyer a desire not to communicate; or
(C) the communication involves misrepresentation, coercion, duress or
harassment.
(b) All restrictions imposed by
this rule also apply to communications with, or investigations of, members of
the family of a juror or a prospective juror.
(c) A lawyer shall reveal promptly to the court improper conduct by a juror or
a prospective juror, or by another toward a juror, a prospective juror or a
member of a juror or a prospective juror's family.
Comment
[1] Many forms of improper influence upon a tribunal
are proscribed by criminal law. Others are specified in the North Carolina Code
of Judicial Conduct, with which an advocate should be familiar. A lawyer is
required to avoid contributing to a violation of provisions. This rule also
prohibits gifts of substantial value to judges or other officials of a tribunal
and stating or implying an ability to influence improperly a public official.
[2] To safeguard the impartiality that is essential to the judicial process,
jurors and prospective jurors should be protected against extraneous
influences. When impartiality is present, public confidence in the judicial
system is enhanced. There should be no extrajudicial communication with
prospective jurors prior to trial or with jurors during trial by or on behalf
of a lawyer connected with the case. Furthermore, a lawyer who is not connected
with the case should not communicate with a juror or a prospective juror about
the case.
[3] After the jury has been discharged, a lawyer may communicate with a juror
unless the communication is prohibited by law or court order.
The lawyer must refrain from asking questions or making comments that tend to
harass or embarrass the juror or to influence actions of the juror in future
cases, and must respect the desire of the juror not to talk with the lawyer.
The lawyer may not engage in improper conduct during the communication.
[4] Vexatious or harassing investigations of jurors or prospective jurors
seriously impair the effectiveness of our jury system. For this reason, a
lawyer or anyone on the lawyer's behalf who conducts an investigation of jurors
or prospective jurors should act with circumspection and restraint.
[5] Communications with, or investigations of, members of families of jurors or
prospective jurors by a lawyer or by anyone on the lawyer's behalf are subject
to the restrictions imposed upon the lawyer with respect to the lawyer's
communications with, or investigations of, jurors or prospective jurors.
[6] Because of the duty to aid in preserving the integrity of the jury system,
a lawyer who learns of improper conduct by or towards a juror, a prospective
juror, or a member of the family of either should make a prompt report to the
court regarding such conduct.
[7] The impartiality of a public servant in our legal system
may be impaired by the receipt of gifts or loans. A lawyer, therefore,
is never justified in making a gift or a loan to a judge, a hearing officer, or
an official or employee of a tribunal.
[8] All litigants and lawyers should have access to tribunals on an equal
basis. Generally, in adversary proceedings, a lawyer should not communicate
with a judge relative to a matter pending before, or which is to be brought
before, a tribunal over which the judge presides in circumstances
which might have the effect or give the appearance of granting undue
advantage to one party. For example, a lawyer should not communicate with a
tribunal by a writing unless a copy thereof is
promptly delivered to opposing counsel or to the adverse party if
unrepresented. Ordinarily, an oral communication by a lawyer with a judge or
hearing officer should be made only upon adequate notice to opposing counsel
or, if there is none, to the opposing party. A lawyer should not condone or
lend himself or herself to private importunities by another with a judge or
hearing officer on behalf of the lawyer or the client.
[9] The advocate's function is to present evidence and argument so that the
cause may be decided according to law. Refraining from abusive or obstreperous
conduct is a corollary of the advocate's right to speak on behalf of litigants.
A lawyer may stand firm against abuse by a judge but should avoid
reciprocation; the judge's default is no justification for similar dereliction
by an advocate. An advocate can present the cause, protect the record for
subsequent review, and preserve professional integrity by patient firmness no
less effectively than by belligerence or theatrics.
[10] The duty to refrain from disruptive conduct applies to any proceeding of a
tribunal, including a deposition. See Rule 1.0(m).
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 16. A lawyer or group of lawyers may contribute to a judge's campaign in a
reasonable amount.
CPR 183. An attorney who represents a judge may not appear before the judge. ( But see 97 Formal Ethics Opinion 1.)
CPR 225. It is permissible for an attorney to appear before his brother judge
if the lawyer for the adverse party and his client consent.
CPR 226. Although an attorney may not appear before his brother judge without
the consent of the parties, his partners and associates may.
CPR 283. The fact that a law firm's secretary is the spouse of a magistrate
does not disqualify members of the law firm from practicing criminal law before
the magistrate.
CPR 318. The fact that an attorney's spouse is a judge's secretary does not
disqualify the attorney from practicing before the judge.
CPR 337. After a jury trial, an attorney may communicate with jurors as to why
they decided issues as they did and their opinions of the attorney's
performance, unless such is prohibited by court rule.
RPC 122. A member of the attorney
general's staff may not consult ex parte with a trial court
judge if it is likely that that attorney or another attorney working in the
same division of the attorney general's office will represent the state in the
appeal of the case.
RPC 214. A lawyer may not send a
jury questionnaire directly to prospective members of the jury but, if the questionnaire is sent out by the court, such communications
are not prohibited.
RPC 237. A lawyer may not
communicate with the judge before whom a proceeding is pending to request
an ex parte order unless opposing counsel is given adequate
notice or unless authorized by law.
97 Formal Ethics Opinion 1. A lawyer may appear in
court before a judge the lawyer represents in a personal matter provided there
is disclosure of the representation and all parties and lawyers agree that the
relationship between the lawyer and the judge is immaterial to the trial of the
matter.
97 Formal Ethics Opinion 3. A lawyer may engage in
an ex parte communication with a judge regarding a scheduling
or administrative matter only if necessitated by the administration of justice
or exigent circumstances and diligent efforts to notify opposing counsel have
failed.
97 Formal Ethics Opinion 5. A lawyer must provide the
opposing counsel with a copy of a proposed order at the same time that the
lawyer submits the proposed order to the judge in anex
parte communication.
98 Formal Ethics Opinion 12. Opinion sets forth the
disclosures a lawyer must make to the judge prior to engaging in an ex parte
communication.
98 Formal Ethics Opinion 13. Opinion restricts informal
written communications with a judge or judicial official relative to a pending
matter.
98 Formal Ethics Opinion 20. Opinion rules that, subject
to a statute prohibiting the withholding of the information, a lawyer's duty to
disclose confidential client information to a bankruptcy court ends when the
case is closed although the debtor's duty to report new property continues for
180 days after the date of filing the petition.
2001 Formal Ethics Opinion
15.
Opinion rules that a lawyer may not communicate ex parte with a judge in
reliance upon the communication being "permitted by law" unless there
is a statute or case law specifically and clearly authorizing such communications
or proper notice is given to the adverse party or counsel. (Note: Judicial
Standards Commission does not consider communications made ex parte pursuant
to G.S. 15A-534.1 to be improper.)
2003 Formal Ethics Opinion
17.
An attorney may only provide a judge with additional authority post-hearing if
the communication is permitted by the rules of the tribunal and a copy of the
writing is furnished simultaneously to opposing counsel.
CASE NOTES
The trial judge did not abuse his discretion in removing a juror and
substituting an alternate juror when the original juror contacted defense
counsel at his home during the weekend recess and persisted in discussing
matters of a personal nature, including counsel's marital status. Although
there was no evidence that any matter which related to
the trial of the defendant was discussed during the conversation, the exercise
of discretion by the trial judge served to safeguard the trial of the defendant
from even the appearance of impropriety. State v. Price, 301
N.C. 437, 272 S.E.2d 103 (1980).
Ethical transgressions by trial counsel do not always constitute legal
error. State v. Sanders ,
303 N.C. 608, 281 S.E.2d 7, cert. denied , 454 U.S. 973,
102 S. Ct. 523, 70 L. Ed. 2d. 392 (1981).
Argument That Testifying Officers Could Be Prosecuted If They Lied. - A
prosecutor who, in closing, made arguments based on matters outside the record
by suggesting that the officers who testified against the defendant could be
prosecuted for perjury and fired from their jobs, and lose their pensions if
they lied, placed the jurors in the moral dilemma of either convicting the
defendant or, in the alternative, causing the officers to suffer the grievous
penalties suggested by the prosecutor. The argument was, therefore, improper
and the defendant was entitled to a new trial. State v. Potter , 69
N.C. App. 199, 316 S.E.2d 359, disc. rev.
denied, 312 N.C. 624, 323 S.E.2d 925 (1984).
The intentional act of soliciting someone to disrupt a criminal trial by an
attorney representing a defendant was not a felony, but would support an order
of disbarment. In re Paul , 84 N.C. App. 491, 353 S.E.2d 254, cert.
denied , 319 N.C. 673, 356 S.E.2d 779 (1987), cert. denied ,
484 U.S.1004, 108 S. Ct. 694, 98 L. Ed. 2d 646 (1988).
Quoted in State v. Bunch, 104 N.C. App. 106, 408 S.E.2d 191
(1991).
Rule 3.6 Trial
Publicity
(a) A lawyer who is participating or
has participated in the investigation or litigation of a matter shall not make
an extrajudicial statement that the lawyer knows or reasonably should know will
be disseminated by means of public communication and will have a substantial
likelihood of materially prejudicing an adjudicative proceeding in the matter.
(b) Notwithstanding paragraph (a), a lawyer may state:
(1) the claim, offense or defense
involved and, except when prohibited by law, the identity of the persons
involved;
(2) the information contained in a public
record;
(3) that an investigation of a matter is
in progress;
(4) the scheduling or result of any step
in litigation;
(5) a request for assistance in obtaining
evidence and information necessary thereto;
(6) a warning of danger concerning the
behavior of a person involved, when there is reason to believe that there
exists the likelihood of substantial harm to an individual or to the public
interest; and
(7) in a criminal case, in addition to
subparagraphs (1) through (6):
(A) the identity, residence, occupation
and family status of the accused;
(B) if the accused has not been
apprehended, information necessary to aid in apprehension of that person;
(C) the fact, time and place of arrest;
and
(D) the identity of investigating and
arresting officers or agencies and the length of the investigation.
Advocate
Rule 3.7 Lawyer as Witness
(a) A lawyer shall not act as advocate at a trial in which the
lawyer is likely to be a necessary witness unless:
(1) the
testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in
the case; or
(3) disqualification of the lawyer would work substantial hardship on the
client.
(b) A lawyer may act as
advocate in a trial in which another lawyer in the lawyer's firm is likely to
be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9.
Comment
[1] Combining the roles of advocate and witness can
prejudice the tribunal and the opposing party and can also involve a conflict
of interest between the lawyer and client.
Advocate-Witness Rule
[2] The tribunal has proper objection when the trier of fact may be
confused or misled by a lawyer serving as both advocate and witness. The
opposing party has proper objection where the combination of roles may
prejudice that party's rights in the litigation. A witness is required to
testify on the basis of personal knowledge, while an advocate is expected to
explain and comment on evidence given by others. It may not be clear whether a
statement by an advocate-witness should be taken as proof or as an analysis of
the proof.
[3] To protect the tribunal, paragraph (a) prohibits a lawyer from
simultaneously serving as advocate and necessary witness except in those
circumstances specified in paragraphs (a)(1) through (a)(3). Paragraph (a)(1)
recognizes that if the testimony will be uncontested, the ambiguities in the
dual role are purely theoretical. Paragraph (a)(2) recognizes that where the
testimony concerns the extent and value of legal services rendered in the
action in which the testimony is offered, permitting the lawyers to testify
avoids the need for a second trial with new counsel to resolve that issue.
Moreover, in such a situation the judge has firsthand knowledge of the matter in
issue; hence, there is less dependence on the adversary process to test the
credibility of the testimony.
[4] Apart from these two exceptions, paragraph (a)(3) recognizes that a
balancing is required between the interests of the client and those of the
tribunal and the opposing party. Whether the tribunal is likely to be misled or
the opposing party is likely to suffer prejudice depends on the nature of the
case, the importance and probable tenor of the lawyer's testimony, and the
probability that the lawyer's testimony will conflict with that of other
witnesses. Even if there is risk of such prejudice, in determining whether the
lawyer should be disqualified, due regard must be given to the effect of
disqualification on the lawyer's client. It is relevant that one or both
parties could reasonably foresee that the lawyer would probably be a witness.
The conflict of interest principles stated in Rules 1.7, 1.9 and 1.10 have no
application to this aspect of the problem.
[5] Because the tribunal is not likely to be misled when a lawyer acts as
advocate in a trial in which another lawyer in the lawyer's firm will testify
as a necessary witness, paragraph (b) permits the lawyer to do so except in
situations involving a conflict of interest.
Conflict of Interest
[6] In determining if it is permissible to act as advocate in a trial in
which the lawyer will be a necessary witness, the lawyer must also consider
that the dual role may give rise to a conflict of interest that will require
compliance with Rules 1.7 or 1.9. For example, if there is likely to be
substantial conflict between the testimony of the client and that of the
lawyer, the representation involves a conflict of interest that requires
compliance with Rule 1.7. This would be true even though the lawyer might not
be prohibited by paragraph (a) from simultaneously serving as advocate and
witness because the lawyer's disqualification would work a substantial hardship
on the client. Similarly, a lawyer who might be permitted to
simultaneously serve as an advocate and a witness by paragraph (a)(3) might be
precluded from doing so by Rule 1.9. The problem can arise whether the
lawyer is called as a witness on behalf of the client or is called by the
opposing party. Determining whether or not such a conflict exists is primarily
the responsibility of the lawyer involved. If there is a conflict of interest,
the lawyer must secure the client's informed consent, confirmed in writing. In
some cases, the lawyer will be precluded from seeking the client's consent. See Rule
1.7. See Rule 1.0(b) for the definition of "confirmed in
writing" and Rule 1.0(f) for the definition of "informed
consent."
[7] Paragraph (b) provides that a lawyer is not disqualified from serving as an
advocate because a lawyer with whom the lawyer is associated in a firm is
precluded from doing so by paragraph (a). If, however, the
testifying lawyer would also be disqualified by Rule 1.7 or Rule 1.9
from representing the client in the matter, other lawyers in the firm will be
precluded from representing the client by Rule 1.10 unless the client gives
informed consent under the conditions stated in Rule 1.7.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 18. An attorney may testify on behalf of his former client after he
has withdrawn, even if he is to be reimbursed for expenses advanced while he
was employed from any recovery.
CPR 93. A law firm may not continue to represent a husband charged with his
wife's murder after the public defender who had
represented a codefendant who had agreed to testify against the husband in the
same case joins the firm.
CPR 162. An attorney may testify as to the value of his services, but may not
testify as to his client's emotional condition.
CPR 212. An attorney who is sued may have his partner represent him and may
testify in his own behalf without his partner's having to withdraw.
CPR 350. An attorney may continue to serve as administrator C.T.A. even though
his secretary may testify as a witness.
RPC 19. An attorney may represent a
client even though his secretary must be called as a witness.
RPC 142. A lawyer may not represent
an estate in litigation against a claimant where the lawyer's testimony may be
necessary to resolve the validity of the claim.
2010
Formal Ethics Opinion 5. In a case involving
international child support enforcement issues, the child support enforcement
lawyer, who works in the North Carolina Attorney General's Office, may call
another lawyer from the attorney general's staff to testify as an expert.
2011
Formal Ethics Opinion 1. Guidelines for the
application of the prohibition in Rule 3.7 on a lawyer serving as both advocate
and witness when the lawyer is the litigant.
CASE NOTES
Counsel Is Not Incompetent to Testify. - The weight of authority in this
country is that while it is a breach of professional ethics for a party's
attorney to testify about other than formal matters without withdrawing from
the litigation, he is not incompetent to testify. The testimony is admissible
if otherwise competent. Town
of Mebane v. Iowa Mut.
Ins. Co., 28 N.C. App. 27, 220 S.E.2d 623 (1975).
But Is Discouraged from Doing So. - The Supreme Court of North Carolina has
historically discouraged the practice of attorneys testifying on behalf of
clients, and although it has been allowed, in most instances the lawyer acting
as a witness for his client had previously surrendered his right to participate
in the litigation. Town of Mebane v. Iowa Mut. Ins. Co. , 28 N.C. App. 27, 220 S.E.2d
623 (1975).
Exceptions Where Counsel May Testify for Client. -
While the Disciplinary Rules set forth in the Code of Professional Conduct (now
replaced by the Rules of Professional Conduct) do not control the admissibility
of evidence or the competency of witnesses, they do govern the ethics and
conduct of attorneys licensed to practice law in the State. It should be the
policy of the courts to give effect to these rules which
specifically address the question of when an attorney may be a witness for a
party he represents. Both the Code of Professional Conduct and the common
practice recognized by the North Carolina Supreme Court provide for exceptions
where attorneys may testify on their clients' behalf. Town
of Mebane v. Iowa Mut.
Ins. Co. ,
28 N.C. App. 27, 220 S.E.2d 623 (1975).
Testimony for Client Before Administrative Board. -
There is no compelling reason to extend existing law by holding that evidence
presented by an attorney who testifies while representing a client before a
local administrative board may not be considered by such local administrative
board. However, attorneys are strongly discouraged from serving as both
witnesses and advocates, even before local administrative boards, unless compelling
circumstances exist.Robinhood
Trails Neighbors v. Winston-Salem Zoning Bd. of Adjustment , 44 N.C.
App. 539, 261 S.E.2d 520, cert. denied , 299 N.C. 737, 267
S.E.2d 663 (1980).
Discretion of Trial Judge. - Whether to allow defense
counsel to testify on a collateral matter, impeachment of a witness, is in the
discretion of the trial judge. State v. Elam , 56 N.C. App. 590, 289
S.E.2d 857, cert. denied , 305 N.C. 461, 292 S.E.2d 577
(1982).
Request by Defendant for Withdrawal of Plaintiff's Counsel.
- Defendant's request that counsel for plaintiff be precluded from testifying
at trial or that his law firm be disqualified from further representation of
plaintiff would be denied, where plaintiff had not yet determined who its witnesses would be. If plaintiff subsequently
determined that counsel should be called as a witness at trial, then the court,
at the appropriate time, could order his withdrawal, as well as that of his law
firm. FDIC v. Kerr, 111 F.R.D. 476 (W.D.N.C.
1986).
This rule only applies to lawyers, not their employees. Seafare Corp. v. Trenor
Corp. ,
88 N.C. App. 404, 363 S.E.2d 643, cert. denied , 322 N.C. 113,
367 S.E.2d 917 (1988).
Preference for Other Witnesses. - If other witnesses
are available who can provide the information sought, it is not error not to
permit an attorney for a party to testify. State v. Daniels, 337
N.C. 243, 446 S.E.2d 298 (1994).
Testimony Not Prejudicial. - Defendant could show no
prejudice from defense counsel's testimony during a voir
dire hearing on a collateral matter regarding the attorney's handling of evidence.State v. Parker ,
119 N.C. App. 328, 459 S.E.2d 9 (1995).
Applied in SuperGuide Corp. v. DirecTV
Enters., Inc. , 141 F. Supp. 2d 616 (W.D.N.C.
2001).
Stated in Spivey v. United States, 912 F.2d 80 (4th Cir.
1990); H.B.S. Contractors v. CumberlandCounty Bd. of
Educ. ,
122 N.C. App. 49, 468 S.E.2d 517 (1996).
Cited in Central Carolina Nissan, Inc. v. Sturgis , 98 N.C. App. 253, 390
S.E.2d 730 (1990); State ex rel . Long
v. American Sec. Life Assurance Co. , 109 N.C. App. 530, 428 S.E.2d 200 (1993);Berkeley Fed.
Sav. & Loan Ass'n v.
Terra Del Sol, Inc., 111 N.C. App. 692, 433 S.E.2d 449 (1993);Beam v. Kerlee ,
120 N.C. App. 203, 461 S.E.2d 911 (1995).
Advocate
Rule 3.8
Special Responsibilities of a Prosecutor
The prosecutor in a criminal case shall:
(a) refrain from prosecuting a charge that the prosecutor knows is not
supported by probable cause;
(b) make reasonable efforts to assure that the accused has been advised of the
right to, and the procedure for obtaining, counsel and has been given
reasonable opportunity to obtain counsel;
(c) not seek to obtain from an unrepresented accused a waiver of important
pretrial rights, such as the right to a preliminary hearing;
(d) after reasonably diligent inquiry, make timely disclosure to the defense of
all evidence or information required to be disclosed by applicable
law, rules of procedure, or court opinions including all evidence or
information known to the prosecutor that tends to negate the guilt of the
accused or mitigates the offense, and, in connection with sentencing, disclose
to the defense and to the tribunal all unprivileged mitigating information
known to the prosecutor, except when the prosecutor is relieved of this
responsibility by a protective order of the tribunal;
(e) not subpoena a lawyer in a grand jury or other criminal proceeding to
present evidence about a past or present client, or participate in the
application for the issuance of a search warrant to a lawyer for the seizure of
information of a past or present client in connection with an investigation of
someone other than the lawyer, unless:
(1) the
information sought is not protected from disclosure by any applicable
privilege;
(2) the evidence sought is essential to the successful completion of an ongoing
investigation or prosecution; and
(3) there is no other feasible alternative to obtain the information;
(f) except for statements that are
necessary to inform the public of the nature and extent of the prosecutor's
action and that serve a legitimate law enforcement purpose, refrain from making
extrajudicial comments that have a substantial likelihood of heightening public
condemnation of the accused and exercise reasonable care to prevent
investigators, law enforcement personnel, employees or other persons assisting
or associated with the prosecutor in a criminal case from making an
extrajudicial statement that the prosecutor would be prohibited from making
under Rule 3.6 or this Rule.
Comment
[1] A prosecutor has the responsibility of a minister of justice and not simply
that of an advocate; the prosecutor's duty is to seek justice, not merely to
convict. This responsibility carries with it specific obligations to see that
the defendant is accorded procedural justice and that guilt is decided upon the
basis of sufficient evidence. Precisely how far the prosecutor is required to
go in this direction is a matter of debate and varies in different
jurisdictions. See the ABA Standards of Criminal Justice Relating to
the Prosecution Function. A systematic abuse of prosecutorial discretion could
constitute a violation of Rule 8.4.
[2] The prosecutor represents the sovereign and, therefore, should use
restraint in the discretionary exercise of government powers, such as in the
selection of cases to prosecute. During trial, the prosecutor is not only an
advocate, but he or she also may make decisions
normally made by an individual client, and those affecting the public interest
should be fair to all. In our system of criminal justice, the accused is to be
given the benefit of all reasonable doubt. With respect to evidence and
witnesses, the prosecutor has responsibilities different from those of a lawyer
in private practice; the prosecutor should make timely disclosure to the
defense of available evidence known to him or her that tends to negate the
guilt of the accused, mitigate the degree of the offense, or reduce the
punishment. Further, a prosecutor should not intentionally avoid pursuit of
evidence merely because he or she believes it will damage the prosecutor's case
or aid the accused.
[3] Paragraph (c) does not apply, however, to an accused appearing pro
se with the approval of the tribunal. Nor does it forbid the lawful
questioning of an uncharged suspect who has knowingly waived the rights to
counsel and silence.
[4] Every prosecutor should be aware of the discovery requirements
established by statutory law and case law. See, e.g., N.C. Gen.
Stat. ¤15A-903 et. seq, Brady v. Maryland, 373 U.S. 83
(1963); Giglio v. U.S., 405 U.S. 150
(1972); Kyles v. Whitley, 514 U.S.
419 (1995). The exception in paragraph (d) recognizes that a prosecutor may
seek an appropriate protective order from the tribunal if disclosure of
information to the defense could result in substantial harm to an individual or
to the public interest.
[5] Paragraph (e) is intended to limit the issuance of lawyer subpoenas in
grand jury and other criminal proceedings, and search warrants for client
information, to those situations in which there is a genuine need to intrude
into the client-lawyer relationship. The provision applies only when someone
other than the lawyer is the target of a criminal investigation.
[6] Paragraph (f) supplements Rule 3.6, which prohibits extrajudicial
statements that have a substantial likelihood of prejudicing an adjudicatory
proceeding. In the context of a criminal prosecution, a prosecutor's
extrajudicial statement can create the additional problem of increasing public
condemnation of the accused. Although the announcement of an indictment, for
example, will necessarily have severe consequences for the accused, a
prosecutor can, and should, avoid comments which have
no legitimate law enforcement purpose and have a substantial likelihood of
increasing public opprobrium of the accused. Nothing in this Comment is
intended to restrict the statements that a prosecutor may make which comply
with Rule 3.6(b) or 3.6(c).
[7] Like other lawyers, prosecutors are subject to Rules 5.1 and 5.3, which relate
to responsibilities regarding lawyers and nonlawyers
who work for or are associated with the lawyer's office. Paragraph (f) reminds
the prosecutor of the importance of these obligations in connection with the
unique dangers of improper extrajudicial statements in a criminal case. In
addition, paragraph (f) requires a prosecutor to exercise reasonable care to
prevent persons assisting or associated with the prosecutor from making
improper extrajudicial statements, even when such persons are not under the
direct supervision of the prosecutor. Ordinarily, the reasonable care standard
will be satisfied if the prosecutor issues the appropriate cautions to
law-enforcement personnel and other relevant individuals.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
Amended November 16, 2006.
ETHICS OPINION NOTES
RPC 129.
Opinion rules that prosecutors and defense attorneys may negotiate plea agreements
in which appellate and postconviction rights are
waived, except in regard to allegations of ineffective assistance of counsel or
prosecutorial misconduct.
RPC 152. Opinion rules that the
prosecutor and the defense attorney must see that all material terms of a
negotiated plea are disclosed in response to direct questions concerning such
matters when pleas are entered in open court.
RPC 197. A prosecutor must notify
defense counsel, jail officials, or other appropriate persons to avoid the
unnecessary detention of a criminal defendant after the charges against the
defendant have been dismissed by the prosecutor.
RPC 204. It is prejudicial to the
administration of justice for a prosecutor to offer special treatment to
individuals charged with traffic offenses or minor crimes in exchange for a
direct charitable contribution to the local school system.
RPC 243. It is prejudicial to the
administration of justice for a prosecutor to threaten to use his discretion to
schedule a criminal trial to coerce a plea agreement from a criminal
defendant.
2011
Formal Ethics Opinion 16. A criminal defense lawyer
accused of ineffective assistance of counsel by a former client may share
confidential client information with prosecutors to help establish a defense to
the claim so long as the lawyer reasonably believes a response is necessary and
the response is narrowly tailored to respond to the allegations.
Transactions with Persons Other Than Clients
Rule 4.1
Truthfulness in Statements to Others
In the course of representing a client a lawyer shall not
knowingly make a false statement of material fact or law to a third person.
Comment
Misrepresentation
[1] A lawyer is required to be truthful when dealing with others on a
client's behalf, but generally has no affirmative duty to inform an opposing
party of relevant facts. A misrepresentation can occur if the lawyer incorporates
or affirms a statement of another person that the lawyer knows is false.
Misrepresentations can also occur by partially true but misleading statements
or omissions that are the equivalent of affirmative false statements. For
dishonest conduct that does not amount to a false statement or for
misrepresentations by a lawyer other than in the course of representing a
client, see Rule 8.4.
Statements of Fact
[2] This Rule refers to statements of fact. Whether a particular statement
should be regarded as one of fact can depend on the circumstances. Under
generally accepted conventions in negotiation, certain types of statements
ordinarily are not taken as statements of material fact. Estimates of price or
value placed on the subject of a transaction and a party's intentions as to an
acceptable settlement of a claim are ordinarily in this category, and so is the
existence of an undisclosed principal except where nondisclosure of the
principal would constitute fraud. Lawyers should be mindful of their obligations
under applicable law to avoid criminal and tortuous misrepresentation.
Crime or Fraud by Client
[3] Under Rule 1.2(d), a lawyer is prohibited from counseling or assisting
a client in conduct that the lawyer knows is criminal or fraudulent. Ordinarily,
a lawyer can avoid assisting a client's crime or fraud by withdrawing from the
representation. Sometimes it may be necessary for the lawyer to give notice of
the fact of withdrawal and to disaffirm an opinion, document, affirmation or
the like. In extreme cases, substantive law may require a lawyer to disclose
information relating to the representation to avoid being deemed to have
assisted the client's crime or fraud. Rule 1.6(b)(1) permits a lawyer to
disclose information when required by law. Similarly, Rule 1.6(b)(4) permits a
lawyer to disclose information when necessary to prevent, mitigate, or rectify
the consequences of a client's criminal or fraudulent act in the commission of
which the lawyer's services were used.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
RPC 182.
A lawyer must disclose to an adverse party with whom the lawyer is negotiating
a settlement that the lawyer's client died.
RPC 236. A lawyer may not issue a
subpoena containing misrepresentations as to the pendency of an action, the
date or location of a hearing, or a lawyer's authority to obtain documentary
evidence.
2008
Formal Ethics Opinion 3. A lawyer may assist a pro se
litigant by drafting pleadings and giving advice without making an appearance
in the proceeding and without disclosing or ensuring the disclosure of his
assistance to the court unless required to do so by law or court order.
2008
Formal Ethics Opinion 14. It is not an ethical
violation when a lawyer fails to attribute or obtain consent when incorporating
into his own brief, contract or pleading excerpts from a legal brief, contract
or pleading written by another lawyer.
Transactions with Persons Other Than Clients
Rule 4.2 Communication with Person Represented by
Counsel
(a) During the representation of a client, a lawyer shall not
communicate about the subject of the representation with a person the lawyer
knows to be represented by another lawyer in the matter, unless the lawyer has
the consent of the other lawyer or is authorized to do so by law or a court
order. It is not a violation of this rule for a lawyer to encourage his or her
client to discuss the subject of the representation with the opposing party in
a good-faith attempt to resolve the controversy.
(b) Notwithstanding section (a) above, in representing a client who has a
dispute with a government agency or body, a lawyer may communicate about the
subject of the representation with the elected officials who have authority
over such government agency or body even if the lawyer knows that the
government agency or body is represented by another lawyer in the matter, but
such communications may only occur under the following circumstances:
(1) in
writing, if a copy of the writing is promptly delivered to opposing counsel;
(2) orally, upon adequate notice to opposing counsel; or
(3) in the course of official proceedings.
Comment
[1] This Rule contributes to the proper functioning of the legal system by
protecting a person who has chosen to be represented by a lawyer in a matter
against possible overreaching by other lawyers who are participating in the
matter, interference by those lawyers with the client-lawyer relationship and
the uncounselled disclosure of information relating to the representation.
[2] This Rule does not prohibit a lawyer who does not have a client relative to
a particular matter from consulting with a person or entity who, though
represented concerning the matter, seeks another opinion as to his or her legal
situation. A lawyer from whom such an opinion is sought should, but is not
required to, inform the first lawyer of his or her participation and
advice.
[3] This Rule does not prohibit communication with a represented person, or an
employee or agent of such a person, concerning matters outside the
representation. For example, the existence of a controversy between a
government agency and a private party, or between two organizations, does not
prohibit a lawyer for either from communicating with nonlawyer
representatives of the other regarding a separate matter. Also, a lawyer having
independent justification or legal authorization for communicating with a
represented person is permitted to do so.
[4] A lawyer may not make a communication prohibited by this Rule through the
acts of another. See Rule 8.4(a). However, parties to a matter may communicate
directly with each other, and a lawyer is not prohibited from advising a client
or, in the case of a government lawyer, investigatory personnel, concerning a
communication that the client, or such investigatory personnel, is legally
entitled to make. The Rule is not intended to discourage good faith efforts by
individual parties to resolve their differences. Nor does the Rule prohibit a
lawyer from encouraging a client to communicate with the opposing party with a
view toward the resolution of the dispute.
[5] Communications authorized by law may include communications by a lawyer on
behalf of a client who is exercising a constitutional or other legal right to
communicate with the government. When a government agency or body is
represented with regard to a particular matter, a lawyer may communicate with
the elected government officials who have authority over that agency under the
circumstances set forth in paragraph (b).
[6] Communications authorized by law may also include investigative activities
of lawyers representing governmental entities, directly or through
investigative agents, prior to the commencement of criminal or civil
enforcement proceedings. When communicating with the accused in a criminal
matter, a government lawyer must comply with this Rule in addition to honoring
the constitutional rights of the accused. The fact that a communication does
not violate a state or federal constitutional right is insufficient to
establish that the communication is permissible under this Rule.
[7] A lawyer who is uncertain whether a communication with a represented person
is permissible may seek a court order. A lawyer may also seek a court order in
exceptional circumstances to authorize a communication that would otherwise be
prohibited by this Rule, for example, where communication with a person
represented by counsel is necessary to avoid reasonably certain injury.
[8] This Rule applies to communications with any person, whether or not a party
to a formal adjudicative proceeding, contract or negotiation, who is
represented by counsel concerning the matter to which the communication
relates. The Rule applies even though the represented person initiates or
consents to the communication. A lawyer must immediately terminate
communication with a person if, after commencing communication, the lawyer
learns that the person is one with whom communication is not permitted by this
Rule.
[9] In the case of a represented organization, this Rule prohibits
communications with a constituent of the organization who supervises, directs
or consults with the organization's lawyer concerning the matter or has
authority to obligate the organization with respect to the matter or whose act
or omission in connection with the matter may be imputed to the organization
for purposes of civil or criminal liability. It also prohibits communications
with any constituent of the organization, regardless of position or level of
authority, who is participating or participated substantially in the legal
representation of the organization in a particular matter. Consent of the
organization's lawyer is not required for communication with a former
constituent unless the former constituent participated substantially in the
legal representation of the organization in the matter. If an employee or agent
of the organization is represented in the matter by his or her own counsel, the
consent by that counsel to a communication would be sufficient for purposes of
this Rule. Compare Rule 3.4(f). In communicating with a current or former
constituent of an organization, a lawyer must not use methods of obtaining
evidence that violate the legal rights of the organization. See Rule 4.4,
Comment [2].
[10] The prohibition on communications with a represented person only applies
in circumstances where the lawyer knows that the person is in fact represented
in the matter to be discussed. This means that the lawyer has actual knowledge
of the fact of the representation; but such actual knowledge may be inferred
from the circumstances. See Rule 1.0(g). Thus, the lawyer cannot evade the
requirement of obtaining the consent of counsel by closing eyes to the obvious.
[11] In the event the person with whom the lawyer communicates is not known to be represented by counsel in the matter, the
lawyer's communications are subject to Rule 4.3.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 2.
An attorney generally does not need the consent of the adverse party to talk to
witnesses.
CPR 138. An attorney representing a party may not send copies of motions to
another party he knows has counsel.
RPC 15. An attorney may interview a
person with adverse interest who is unrepresented and make a demand or propose
a settlement.
RPC 30. A district attorney may not
communicate or cause another to communicate with a represented defendant
without the defense lawyer's consent.
RPC 39. An attorney may not
communicate settlement demands directly to an insurance company
which has employed counsel to represent its insured unless that lawyer
consents.
RPC 61. A defense attorney may
interview a child who is the prosecuting witness in a molestation case without
the knowledge or consent of the district attorney.
RPC 67. An attorney generally may
interview a rank and file employee of an adverse corporate party without the
knowledge or consent of the corporate party or its counsel.
RPC 81. A lawyer may interview an
unrepresented former employee of an adverse corporate party without the
permission of the corporation's lawyer. ( But
see 97 FEO 2)
RPC 87. A lawyer wishing to
interview a witness who is not a party, but who is represented by counsel, must
obtain the consent of the witness' lawyer.
RPC 93. Opinion concerns several
situations in which an attorney who represents a criminal defendant wishes to
interview other individuals who are represented by attorneys who will not agree
to permit the attorney to interview their clients.
RPC 110. An attorney employed by an
insurer to defend in the name of the defendant pursuant to underinsured
motorist coverage may not communicate with that individual without the consent
of another attorney employed to represent that individual by her liability
insurer.
RPC 128. A lawyer may not
communicate with an adverse corporate party's house counsel, who appears in the
case as a corporate manager, without the consent of the corporation's
independent counsel.
RPC 132. A lawyer for a party
adverse to the government may freely communicate with government officials
concerning the matter until notified that the government is represented in the
matter.
RPC 162. A lawyer may not
communicate with the opposing party's nonparty treating physician about the
physician's treatment of the opposing party unless the opposing party
consents.
RPC 180. A lawyer may not passively
listen while the opposing party's nonparty treating physician comments on his
or her treatment of the opposing party unless the opposing party
consents.
RPC 184. The lawyer for opposing
party may communicate directly with the pathologist who performed an autopsy on
plaintiff's decedent without the consent of the personal representative of the
decedent's estate.
RPC 193. The attorney for the
plaintiffs in a personal injury action arising out of a motor vehicle accident
may interview the unrepresented defendant even though the
uninsured motorist insurer, which had elected to defend the claim in the name
of the defendant, is represented by an attorney in the matter.
RPC 202. An attorney may communicate
in writing with the members of an elected body which is represented by a lawyer
in a matter if the purpose of the communication is to request that the matter
be placed on the public meeting agenda of the elected body and a copy of the
written communication is given to the attorney for the elected body.
RPC 219. A lawyer may communicate
with a custodian of public records, pursuant to the North Carolina Public
Records Act, for the purpose of making a request to examine public records
related to the representation although the custodian is an adverse party whose
lawyer does not consent to the communication.
RPC 224. Employer's lawyer may not
engage in direct communications with the treating physician for an employee
with a workers' compensation claim.
RPC 233. A deputy attorney general
attorney who represents the state on the appeal of a death sentence should send
to the defense lawyer a copy of a letter the deputy attorney general received
from the defendant.
RPC 249. A lawyer may not
communicate with a child who is represented by a guardian ad litem and an
attorney advocate unless the lawyer obtains the consent of the attorney
advocate.
97
Formal Ethics Opinion 2. A lawyer may interview an
unrepresented former employee of an adverse represented organization about the
subject of the representation unless the former employee participated
substantially in the legal representation of the organization in the matter.
97
Formal Ethics Opinion 10. A prosecutor may instruct a
law enforcement officer to send an undercover officer into the prison cell of a
represented criminal defendant to observe the defendant's communications with
other inmates in the cell.
99
Formal Ethics Opinion 10. Opinion rules that a
government lawyer working on a fraud investigation may instruct an investigator
to interview employees of the target organization provided the investigator
does not interview an employee who participates in the legal representation of
the organization or an officer or manager of the organization who has the
authority to speak for and bind the organization.( See
also comment [9] to Rule 4.2)
2002 Formal Ethics Opinion
8.
Opinion rules that a lawyer who is appointed the guardian ad litem for a minor
plaintiff in a tort action and is represented in this capacity by legal
counsel, must be treated by opposing counsel as a represented party and,
therefore, direct contact with the guardian ad litem, without consent of
counsel, is prohibited.
2003
Formal Ethics Opinion 2. Lawyer may not communicate
directly with the opposing party although the opposing lawyer appears to be
impaired by reason of substance abuse or mental impairment.
2003
Formal Ethics Opinion 4. A lawyer may not proffer
evidence gained during a private investigator's verbal communication with an
opposing party known to be represented by legal
counsel unless the lawyer discloses the source of the evidence to the opposing
lawyer and to the court prior to the proffer.
2004 FEO 4 - Opinion rules
that a lawyer may ask questions of a deponent that were recommended by another
lawyer, although the deponent is the defendant in the other lawyerÕs case,
provided notice of the deposition is given to the deponentÕs lawyer.
2005
Formal Ethics Opinion 5. Opinion explores the extent
to which a lawyer may communicate with employees or officials of a represented
government entity.
2006
Formal Ethics Opinion 19. The prohibition against
communications with represented persons does not apply to a lawyer acting
solely as a guardian ad litem.
2009
Formal Ethics Opinion 7. A criminal defense
lawyer or a prosecutor may not interview a child who is the alleged victim in a
criminal case alleging physical or sexual abuse if the child is younger than
the age of maturity as determined by the General Assembly for the purpose of an
in-custody interrogation (currently age fourteen) unless the lawyer has the
consent of a non-accused
parent or guardian or a court order allows the lawyer to seek an interview with
the child without such consent; a lawyer may interview a child who is this
age or older without such consent or authorization provided the lawyer complies
with Rule 4.3, reasonably determines that the child is sufficiently mature to
understand the lawyerÕs role and purpose, and avoids any conduct designed to coerce
or intimidate the child.
2010
Formal Ethics Opinion 5. A lawyer defending a
non-custodial parent in a child support action brought by the lawyer for the
countyÕs child support enforcement program does not represent the parent and
the lawyerÕs direct communications with the custodian do not violate Rule 4.2.
2011
Formal Ethics Opinion 15. Pursuant to the North Carolina
Public Records Act, a lawyer may communicate with a government official for the
purpose of identifying a custodian of public records and with the custodian of
public records to make a request to examine public records related to the
representation although the custodian is an adverse party, or an employee of an
adverse party, whose lawyer does not consent to the communication.
CASE NOTES
This rule does not prevent a person in custody from making inculpatory
statements upon waiver of the right to counsel. State v. Romero , 56
N.C. App. 48, 286 S.E.2d 903, disc. rev.
denied , 306 N.C. 391, 294 S.E.2d 218 (1982).
Interview of Plaintiff 's Physician by Defense Attorneys.
- Defense attorneys may not interview a plaintiff 's treating physician
privately without the plaintiff 's express consent. Defendant must use the
statutorily recognized methods of discovery set out in ¤ 1A-1, Rule 26 of the
Rules of Civil Procedure. Crist v. Moffatt , 326 N.C. 326, 389 S.E.2d 41
(1990).
Applied in State v. Thompson , 332 N.C. 204, 420 S.E.2d 395 (1992).
Quoted in McCallum v. CSX Transp ., Inc., 149 F.R.D. 104 (M.D.N.C. 1993).
Transactions with Persons Other Than Clients
Rule 4.3
Dealing with Unrepresented Person
In dealing on behalf of a
client with a person who is not represented by counsel, a lawyer shall not:
(a) give legal advice to the person, other than the advice to secure counsel,
if the lawyer knows or reasonably should know that the interests of such person
are or have a reasonable possibility of being in conflict with the interests of
the client; and
(b) state or imply that the lawyer is disinterested. When the lawyer knows or
reasonably should know that the unrepresented person misunderstands the
lawyer's role in the matter, the lawyer shall make reasonable efforts to
correct the misunderstanding.
Comment
[1] An unrepresented person, particularly one not experienced in dealing with
legal matters, might assume that a lawyer is disinterested in loyalties or is a
disinterested authority on the law even when the lawyer represents a client. To
avoid a misunderstanding, a lawyer will typically need to identify the lawyer's
client and, where necessary, explain that the client has interests opposed to
those of the unrepresented person. For misunderstandings that sometimes arise
when a lawyer for an organization deals with an unrepresented constituent, see
Rule 1.13(d).
[2] The Rule distinguishes between situations involving unrepresented persons
whose interests may be adverse to those of the lawyer's client and those in
which the person's interests are not in conflict with the client's. In the
former situation, the possibility that the lawyer will compromise the
unrepresented person's interests is so great that the Rule prohibits the giving
of any advice, apart from the advice to obtain counsel. This Rule does not
prohibit a lawyer from negotiating the terms of a transaction or settling a
dispute with an unrepresented person. So long as the lawyer has explained that
the lawyer represents an adverse party and is not representing the person, the
lawyer may inform the person of the terms on which the lawyer's client will
enter into an agreement or settle a matter, prepare documents that require the
person's signature and explain the lawyer's own view of the meaning of the
document or the lawyer's view of the underlying legal obligations.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICSOPINIONNOTES
CPR 296.
The attorney for the plaintiff in a domestic case may not make available to the
defendant a form waiving the right to answer and other rights, nor may he allow
his client to provide such a form to the defendant. ( But
see RPC 165)
RPC 15. An attorney may interview a
person with adverse interest who is unrepresented and make a demand or propose
a settlement.
RPC 61. A defense attorney may
interview a child who is the prosecuting witness in a molestation case without
the knowledge or consent of the district attorney.
RPC 165. An attorney may provide a
confession of judgment or consent order to an unrepresented adverse party for
execution by that party so long as the lawyer does not undertake to advise the
adverse party or feign disinterestedness.
RPC 189. The district attorney's
staff may not give legal advice about pleas to an unrepresented person charged
with a traffic infraction.
RPC 193. The attorney for the
plaintiffs in a personal injury action arising out of a motor vehicle accident
may interview the unrepresented defendant even though the
uninsured motorist insurer, which had elected to defend the claim in the name
of the defendant, is represented by an attorney in the matter.
RPC 194. In a letter to an
unrepresented prospective defendant in a personal injury action, the plaintiff
's lawyer may not give legal advice nor may he create the impression that he is
concerned about or protecting the interests of the unrepresented prospective
defendant.
2002
Formal Ethics Opinion 6. Opinion rules that the
lawyer for the plaintiff may not prepare the answer to a complaint for an
unrepresented adverse party to file pro se.
2003
Formal Ethics Opinion 7. A lawyer may not prepare a
power of attorney for the benefit of the principal at the request of another
individual or third-party payer without consulting
with, exercising independent professional judgment on behalf of, and obtaining
consent from the principal.
2009
Formal Ethics Opinion 7. A criminal defense
lawyer or a prosecutor may not interview a child who is the alleged victim in a
criminal case alleging physical or sexual abuse if the child is younger than
the age of maturity as determined by the General Assembly for the purpose of an
in-custody interrogation (currently age fourteen) unless the lawyer has the
consent of a non-accused
parent or guardian or a court order allows the lawyer to seek an interview with
the child without such consent; a lawyer may interview a child who is this
age or older without such consent or authorization provided the lawyer complies
with Rule 4.3, reasonably determines that the child is sufficiently mature to
understand the lawyerÕs role and purpose, and avoids any conduct designed to
coerce or intimidate the child.
2009
Formal Ethics Opinion 12. A lawyer may prepare an
affidavit and confession of judgment for an unrepresented adverse party
provided the lawyer explains who he represents and
does not give the unrepresented party legal advice; however, the lawyer may not
prepare a waiver of exemptions for the adverse party.
Transactions with Persons Other Than Clients
Rule 4.4 Respect for Rights
of Third Persons
(a) In representing a client, a lawyer shall not use means that
have no substantial purpose other than to embarrass, delay, or burden a third
person, or use methods of obtaining evidence that violate the legal rights of
such a person.
(b) A lawyer who receives a writing relating to the representation of the
lawyerÕs client and knows or reasonably should know that the writing was
inadvertently sent shall promptly notify the sender.
Comment
[1] Responsibility to a client requires a lawyer to subordinate the interests
of others to those of the client, but that responsibility does not imply that a
lawyer may disregard the rights of third persons. It is impractical to
catalogue all such rights, but they include legal restrictions on methods of
obtaining evidence from third persons and unwarranted intrusions into
privileged relationships, such as the client-lawyer relationship.
[2] Paragraph (b) recognizes that lawyers sometimes receive
writings that were mistakenly sent or produced by opposing parties or their
lawyers. If a lawyer knows or reasonably should know that such a writing was sent inadvertently, then this rule requires
the lawyer promptly to notify the sender in order to permit that person to take
protective measures. This duty is imputed to all lawyers in a firm. Whether the
lawyer who receives the writing is required to take additional steps, such as returning
the original writing, is a matter of law beyond the scope of these rules, as is
the question of whether the privileged status of a writing has been waived.
Similarly, thisRule does not address the legal duties
of a lawyer who receives a writing that the lawyer knows or reasonably should
know may have been wrongfully obtained by the sending person. See
Rule 1.0(o) for the definition of "writing."
[3] Some lawyers may choose to return a writing
unread, for example, when the lawyer learns before receiving the writing that
it was inadvertently sent to the wrong address. Whether the lawyer is required
to do so is a matter of law. When return of the writing is
not required by law, the decision voluntarily to return such a writing
is a matter of professional judgment ordinarily reserved to the lawyer. See
Rules 1.2 and 1.4.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003; August 18, 2005
ETHICS OPINION NOTES
RPC 181. A lawyer may not seek to
disqualify another lawyer from representing the opposing party by instructing a
client to consult with the other lawyer about the subject matter of the
representation when the client has no intention of retaining the other
lawyer.
RPC 252. Opinion rules that a lawyer
in receipt of materials that appear on their face to be subject to the
attorney-client privilege or otherwise confidential, which were inadvertently
sent to the lawyer by the opposing party or opposing counsel, should refrain
from examining the materials and return them to the sender.
2007
Formal Ethics Opinion 1. A lawyer owes no ethical
duty to the heirs of an estate that he represents in a wrongful death action
except as set forth in Rule 4.4.
2009
Formal Ethics Opinion 5. A lawyer may serve the
opposing party with discovery requests that require the party to reveal her
citizenship status, but the lawyer may not report the status to ICE unless
required to do so by federal or state law.
2009
Formal Ethics Opinion 1. A lawyer must use reasonable
care to prevent the disclosure of confidential client information hidden in
metadata when transmitting an electronic communication and a lawyer who receives
an electronic communication from another party or another party's lawyer must
refrain from searching for and using confidential information found in the metadata
embedded in the document.
2011
Formal Ethics Opinion 16. A criminal defense lawyer
accused of ineffective assistance of counsel by a former client may share
confidential client information with prosecutors to help establish a defense to
the claim so long as the lawyer reasonably believes a response is necessary and
the response is narrowly tailored to respond to the allegations.
Law Firms and Associations
Rule 5.1
Responsibilities of Partners, Managers, and Supervisory Lawyers
(a) A partner in a law firm, and a lawyer who individually or
together with other lawyers possesses comparable managerial authority, shall
make reasonable efforts to ensure that the firm or the organization has in
effect measures giving reasonable assurance that all lawyers in the firm or the
organization conform to the Rules of Professional Conduct.
(b) A lawyer having direct supervisory authority over another lawyer shall make
reasonable efforts to ensure that the other lawyer conforms to the Rules of
Professional Conduct.
(c) A lawyer shall be responsible for another lawyer's violation of the Rules
of Professional Conduct if:
(1) the
lawyer orders or, with knowledge of the specific conduct, ratifies the conduct
involved; or
(2) the lawyer is a partner or has comparable managerial authority in the law
firm in which the other lawyer practices, or has direct supervisory authority
over the other lawyer, and knows of the conduct at a time when its consequences
can be avoided or mitigated but fails to take reasonable remedial action to
avoid the consequences.
Comment
[1] Paragraph (a) applies to lawyers who have managerial authority over the
professional work of a firm or legal department of an organization. See Rule
1.0(d). This includes members of a partnership, the shareholders in a law firm
organized as a professional corporation, and members of other associations
authorized to practice law; lawyers having comparable managerial authority in a
legal services organization or a law department of an enterprise or government
agency; and lawyers who have intermediate managerial responsibilities in a
firm. Paragraph (b) applies to lawyers who have supervisory authority over the
work of other lawyers in a firm or organization.
[2] Paragraph (a) requires lawyers with managerial authority within a firm or
organization to make reasonable efforts to establish internal policies and
procedures designed to provide reasonable assurance that all lawyers in the
firm or organization will conform to the Rules of Professional Conduct. Such
policies and procedures include those designed to detect and resolve conflicts
of interest, identify dates by which actions must be taken in pending matters,
account for client funds and property and ensure that inexperienced lawyers are
properly supervised.
[3] Other measures that may be required to fulfill the responsibility
prescribed in paragraph (a) can depend on the firm's
or organization's structure and the nature of its practice. In a small firm of
experienced lawyers, informal supervision and periodic review of compliance
with the required systems ordinarily will suffice. In a large firm or
organization, or in practice situations in which difficult ethical problems
frequently arise, more elaborate measures may be necessary. Some firms, for example,
have a procedure whereby junior lawyers can make confidential referral of
ethical problems directly to a designated senior partner or special
committee. See Rule 5.2. Firms and organizations, whether
large or small, may also rely on continuing legal education in professional
ethics. In any event, the ethical atmosphere of a firm or organization can
influence the conduct of all its members and the partners and managing lawyers
may not assume that all lawyers associated with the firm or organization will
inevitably conform to the Rules.
[4] Paragraph (c) expresses a general principle of personal responsibility for
acts of another. See also Rule 8.4(a).
[5] Paragraph (c)(2) defines the duty of a partner or other lawyer having
comparable managerial authority in a law firm, as well as a lawyer who has
direct supervisory authority over performance of specific legal work by another
lawyer. Whether a lawyer has such supervisory authority in particular
circumstances is a question of fact. Partners and lawyers with comparable
authority have at least indirect responsibility for all work being done by the
firm, while a partner or manager in charge of a particular matter ordinarily
also has supervisory responsibility for the work of other firm lawyers engaged
in the matter. Appropriate remedial action by a partner or managing lawyer
would depend on the immediacy of that lawyer's involvement and the seriousness
of the misconduct. A supervisor is required to intervene to prevent avoidable
consequences of misconduct if the supervisor knows that the misconduct
occurred. Thus, if a supervising lawyer knows that a subordinate misrepresented
a matter to an opposing party in negotiation, the supervisor as well as the
subordinate has a duty to correct the resulting misapprehension.
[6] Professional misconduct by a lawyer under supervision could reveal a
violation of paragraph (b) on the part of the supervisory lawyer even though it
does not entail a violation of paragraph (c) because there was no direction,
ratification or knowledge of the violation.
[7] Apart from this Rule and Rule 8.4(a), a lawyer does not have disciplinary
liability for the conduct of a partner, associate or subordinate. Moreover,
this Rule is not intended to establish a standard for vicarious criminal or
civil liability for the acts of another lawyer. Whether a lawyer may be liable
civilly or criminally for another lawyer's conduct is a question of law beyond
the scope of these Rules.
[8] The duties imposed by this Rule on managing and supervising lawyers do not
alter the personal duty of each lawyer in a firm to abide by the Rules of
Professional Conduct. See Rule 5.2(a).
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
Law Firms and Associations
Rule 5.2
Responsibilities of a Subordinate Lawyer
(a)
A
lawyer is bound by the Rules of Professional Conduct notwithstanding that the
lawyer acted at the direction of another person.
(b) A subordinate lawyer does not violate the
Rules of Professional Conduct if that lawyer acts in accordance with a
supervisory lawyer's reasonable resolution of an arguable question of
professional duty.
Comment
[1] Although a lawyer is not relieved of
responsibility for a violation by the fact that the lawyer acted at the
direction of a supervisor, that fact may be relevant in determining whether a
lawyer had the knowledge required to render conduct a violation of the Rules.
For example, if a subordinate filed a frivolous pleading at the direction of a
supervisor, the subordinate would not be guilty of a professional violation
unless the subordinate knew of the document's frivolous character.
[2] When lawyers in a supervisor-subordinate
relationship encounter a matter involving professional judgment as to ethical
duty, the supervisor may assume responsibility for making the judgment.
Otherwise a consistent course of action or position could not be taken. If the
question can reasonably be answered only one way, the duty of both lawyers is
clear and they are equally responsible for fulfilling it. However, if the
question is reasonably arguable, someone has to decide upon the course of
action. That authority ordinarily reposes in the supervisor, and a subordinate
may be guided accordingly. For example, if a question arises whether the
interests of two clients conflict under Rule 1.7, the supervisor's reasonable
resolution of the question should protect the subordinate professionally if the
resolution is subsequently challenged.
History Note: Statutory Authority G.
84-23
Law Firms and Associations
Rule 5.3
Responsibilities Regarding Nonlawyer Assistants
With respect to a nonlawyer employed or
retained by or associated with a lawyer:
(a) a partner, and a lawyer who individually or together with other lawyers
possesses comparable managerial authority in a law firm or organization shall
make reasonable efforts to ensure that the firm or organization has in effect
measures giving reasonable assurance that the nonlawyer's
conduct is compatible with the professional obligations of the lawyer;
(b) a lawyer having direct supervisory authority over the nonlawyer
shall make reasonable efforts to ensure that the nonlawyer's
conduct is compatible with the professional obligations of the lawyer; and
(c) a lawyer shall be responsible for conduct of such a nonlawyer
that would be a violation of the Rules of Professional Conduct if engaged in by
a lawyer if:
(1) the
lawyer orders or, with the knowledge of the specific conduct, ratifies the
conduct involved; or
(2) the lawyer is a partner or has comparable managerial authority in the law
firm or organization in which the person is employed, or has direct supervisory
authority over the nonlawyer, and knows of the
conduct at a time when its consequences can be avoided or mitigated but fails
to take reasonable remedial action to avoid the consequences.
Comment
[1] Lawyers generally employ assistants in their practice, including
secretaries, investigators, law student interns, and paraprofessionals. Such assistants, whether employees or independent contractors, act
for the lawyer in rendition of the lawyer's professional services. A
lawyer must give such assistants appropriate instruction and supervision
concerning the ethical aspects of their employment, particularly regarding the
obligation not to disclose information relating to representation of the
client, and should be responsible for their work product. The measures employed
in supervising nonlawyers should take account of the
fact that they do not have legal training and are not subject to professional
discipline.
[2] Paragraph (a) requires lawyers with managerial authority within a law firm
or organization to make reasonable efforts to establish internal policies and
procedures designed to provide reasonable assurance that nonlawyers
in the firm will act in a way compatible with the Rules of Professional
Conduct. See Comment [1] to Rule 5.1. Paragraph (b) applies to
lawyers who have supervisory authority over the work of a nonlawyer.
Paragraph (c) specifies the circumstances in which a lawyer is responsible for
conduct of a nonlawyer that would be a violation of
the Rules of Professional Conduct if engaged in by a lawyer.
[3] A lawyer who discovers that a nonlawyer has
wrongfully misappropriated money from the lawyer's trust account must inform
the North Carolina State Bar pursuant to Rule 1.15-2(o).
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 163. An attorney may use a secretarial agency so long as reasonable
care is used to protect confidentiality.
CPR 182. A layman may be employed to interview and represent social security
claimants if the clients consent after disclosure of the layman's
nonprofessional status.
CPR 253. A paralegal employed by a law firm may have a business card with the
firm's identification.
CPR 262. A law firm's office manager may have a business card with the firm's
identification.
CPR 334. An attorney's secretary may also work for private investigator. The
attorney must take care that client confidences are not compromised.
RPC 29. An attorney may not rely
upon title information from an abstract firm unless he supervised the nonlawyer who did the work.
RPC 70. A legal assistant may
communicate and negotiate with a claims adjuster if directly supervised by the
attorney for whom he or she works.
RPC 74. A firm
which employs a paralegal is not disqualified from representing an
interest adverse to that of a party represented by the firm for which the
paralegal previously worked if the paralegal is screened from participation in
the case.
RPC 102. A lawyer may not permit the
employment of court reporting services to be influenced by the possibility that
the lawyer's employees might receive premiums, prizes or other personal
benefits.
RPC 139. An attorney, having
undertaken to represent adoptive parents, may sign and file adoption petition
prepared by social services organization under her direct supervision.
RPC 152. District attorney is
responsible for plea negotiating practices of lay assistant under her
supervision of which she has knowledge.
RPC 176. A lawyer who
employs a paralegal is not disqualified from representing a party whose
interests are adverse to that of a party represented by a lawyer for whom the
paralegal previously worked.
RPC 183. A lawyer may not permit a
legal assistant to examine or represent a witness at a deposition.
RPC 216. A lawyer may use the
services of a nonlawyer independent contractor to
search a title provided the nonlawyer is properly supervised by the lawyer.
RPC 238. A lawyer is subject to the
Rules of Professional Conduct with respect to the provision of a law-related
service, such as financial planning, if the law-related service is provided in
circumstances that are not distinct from the lawyer's provision of legal
services to clients.
99
Formal Ethics Opinion 6. Opinion examines the
ownership of a title insurance agency by lawyers in North and South
Carolina as well as the supervision of an independent paralegal.
2000
Formal Ethics Opinion 10. Opinion rules that a lawyer
may have a nonlawyer employee deliver a message to a
court holding calendar call, if the lawyer is unable to attend due to a
scheduling conflict with another court or for another legitimate reason.
2002
Formal Ethics Opinion 9. Opinion rules that a nonlawyer assistant supervised by a lawyer may identify to
the client who is a party to such a transaction the documents to be executed
with respect to the transaction, direct the client as to the correct place on
each document to sign, and handle the disbursement of proceeds for a
residential real estate transaction, even though the supervising lawyer is not
physically present.
2005
Formal Ethics Opinion 2. Opinion
rules that a law firm that employs a nonlawyer to
represent Social Security claimants must so disclose in any advertising for
this service and to prospective clients.
2005
Formal Ethics Opinion 6. Opinion rules that the
compensation of a nonlawyer law firm employee who
represents Social Security disability claimants before the Social Security
Administration may be based upon the income generated by such representation.
Law Firms and Associations
Rule 5.4
Professional Independence of a Lawyer
(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
(1) an
agreement by a lawyer with the lawyer's firm, partner, or associate may provide
for the payment of money, over a reasonable period of time after the lawyer's
death, to the lawyer's estate or to one or more specified persons;
( 2) a lawyer who purchases the practice of a deceased, disabled, or
disappeared lawyer may, pursuant to the provisions of Rule 1.17, pay to the
estate or other representative of that lawyer the agreed-upon purchase
price;
(3) a lawyer who undertakes to complete unfinished legal business of a deceased
lawyer or a disbarred lawyer may pay to the estate of the deceased lawyer or to
the disbarred lawyer that portion of the total compensation that fairly
represents the services rendered by the deceased lawyer or the disbarred
lawyer;
(4) a lawyer or law firm may include nonlawyer
employees in a compensation or retirement plan even though the plan is based in
whole or in part on a profit-sharing arrangement; and
(5) a lawyer may share court-awarded legal fees with a nonprofit organization
that employed, retained or recommended employment of the lawyer in the matter.
(b) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership
consist of the practice of law.
(c) A lawyer shall not permit a person who recommends, engages, or pays the
lawyer to render legal services for another to direct or regulate the lawyer's
professional judgment in rendering such legal services.
(d) A lawyer shall not practice with or in the form of a professional
corporation or association authorized to practice law for a profit, if:
(1) a
nonlawyer owns any interest therein, except that a
fiduciary representative of the estate of a lawyer may hold the stock or
interest of the lawyer for a reasonable time during administration; or
(2) a nonlawyer has the right to direct or control
the professional judgment of a lawyer.
Comment
[1] The provisions of this Rule express traditional
limitations on sharing fees. These limitations are to protect the lawyer's
professional independence of judgment. Where someone other than the client pays
the lawyer's fee or salary, or recommends employment of the lawyer, that
arrangement does not modify the lawyer's obligation to the client. As stated in
paragraph (c), such arrangements should not interfere with the lawyer's
professional judgment.
[2] This Rule also expresses traditional limitations on permitting a third
party to direct or regulate the lawyer's professional judgment in rendering
legal services to another. See also Rule 1.8(f) (lawyer may
accept compensation from a third party as long as there is no interference with
the lawyer's independent professional judgment and the client gives informed
consent).
[3] Although a nonlawyer may serve as a director or
officer of a professional corporation organized to practice law if permitted by
law, such a nonlawyer director or officer may not
have the authority to direct or control the conduct of the lawyers who practice
with the firm.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 239. A law firm may set up a profit-sharing plan for firm members
and lay employees.
CPR 289. It is improper for an attorney to agree to share a legal fee with a
paralegal.
CPR 343. A succeeding attorney may share fees with a disbarred lawyer for
services rendered prior to disbarment.
RPC 38. Attorneys in North
Carolina may use an attorney placement service which
places independent attorneys with other attorneys or firms on a temporary contract
basis for a placement fee.
RPC 104. Associate attorneys may be
leased back to their firms.
98
Formal Ethics Opinion 17. Opinion rules that a lawyer
may not comply with an insurance carrier's billing requirements and guidelines
if they interfere with the lawyer's ability to exercise his or her independent
professional judgment in the representation of the insured.
2000
Formal Ethics Opinion 9. Opinion explores the
situations in which a lawyer who is also a CPA may provide legal services and
accounting services from the same office.
2001
Formal Ethics Opinion 2. Opinion rules that there is
no prohibition on a law firm entering into a contract with a management firm to
administer the firm provided the lawyers in the firm can fulfill their ethical
duties including the duty to exercise independent professional judgment, the
duty to protect and safe keep client property, and the duty to maintain client
confidences.
2005
Formal Ethics Opinion 6. Opinion rules that the
compensation of a nonlawyer law firm employee who
represents Social Security disability claimants before the Social Security
Administration may be based upon the income generated by such representation.
2010
Formal Ethics Opinion 4. Paying a percentage fee to a
barter exchange manager is a surcharge on the transaction and is not fee
sharing with a nonlawyer.
2011
Formal Ethics Opinion 10. A lawyer may advertise on a
website that offers daily discounts to consumers where the website companyÕs
compensation is a percentage of the amount paid to the lawyer if certain
disclosures are made and certain conditions are satisfied.
Law Firms and Associations
Rule 5.5
Unauthorized Practice of Law
(a) A lawyer shall not practice law in a jurisdiction where doing
so violates the regulation of the legal profession in that jurisdiction.
(b) A lawyer who is not admitted to practice in this jurisdiction shall not:
(1) except
as authorized by these Rules or other law, establish an office or other
systematic and continuous presence in this jurisdiction for the practice of
law; or
(2) hold out to the public or otherwise represent that the lawyer is admitted
to practice law in this jurisdiction.
(c) A lawyer admitted to practice in another jurisdiction, but not
in this jurisdiction, does not engage in the unauthorized practice of law in
this jurisdiction if the lawyer's conduct is in accordance with these Rules
and:
(1) the
lawyer is authorized by law or order to appear before a tribunal or
administrative agency in this jurisdiction or is preparing for a potential
proceeding or hearing in which the lawyer reasonably expects to be so
authorized; or
(2) other than engaging in conduct governed by paragraph (1):
(A) the
lawyer provides legal services to the lawyer's employer or its organizational
affiliates and the services are not services for which pro hac
vice admission is required; a lawyer acting pursuant to this paragraph is not
subject to the prohibition in Paragraph (b)(1);
(B) the lawyer acts with respect to a matter that arises out of or is otherwise
reasonably related to the lawyer's representation of a client in a jurisdiction
in which the lawyer is admitted to practice;
(C) the lawyer acts with respect to a matter that is in or is reasonably
related to a pending or potential arbitration, mediation, or other alternative
dispute resolution proceeding in this or another jurisdiction, if the services
arise out of or are reasonably related to the lawyer's representation of a
client in a jurisdiction in which the lawyer is admitted to practice and are
not services for which pro hac vice admission is
required;
(D) the lawyer is associated in the matter with a lawyer admitted to practice
in this jurisdiction who actively participates in the representation; or
(E) the lawyer is providing services limited to federal law, international law,
the law of a foreign jurisdiction or the law of the jurisdiction in which the
lawyer is admitted to practice.
(F) the
lawyer is the subject of a pending application for admission to the North
Carolina State Bar by comity, having never previously been denied admission to
the North Carolina State Bar for any reason, and
(i)
is licensed to practice law in a state with
which North Carolina has comity in regard to admission to practice
law;
(ii) is
a member in good standing in every jurisdiction in which the lawyer is licensed
to practice law;
(iii) has
satisfied the educational and experiential requirements prerequisite to comity
admission to the North Carolina State Bar;
(iv) is
domiciled in North Carolina;
(v) has
established a professional relationship with a North Carolina law firm and is
actively supervised by at least one licensed North Carolina attorney affiliated
with that law firm; and
(vi) gives
written notice to the secretary of the North Carolina State Bar that the lawyer
intends to begin the practice of law pursuant to this provision, provides the
secretary with a copy of the lawyerÕs application for admission to the State
Bar, and agrees that the lawyer is subject to these rules and the disciplinary
jurisdiction of the North Carolina State Bar. A lawyer acting pursuant to
this provision is not subject to the prohibition in Paragraph (b) (1), may not
provide services for which pro hac vice admission
is required, and shall be ineligible to practice law in this jurisdiction
immediately upon being advised that the lawyerÕs application for comity
admission has been denied.
(d) A lawyer shall not assist another person in the unauthorized
practice of law.
(e) A lawyer or law firm shall not employ a disbarred or suspended lawyer as a
law clerk or legal assistant if that individual was associated with such lawyer
or law firm at any time on or after the date of the acts which resulted in
disbarment or suspension through and including the effective date of disbarment
or suspension.
(f) A lawyer or law firm employing a disbarred or suspended lawyer as a law
clerk or legal assistant shall not represent any client represented by the
disbarred or suspended lawyer or by any lawyer with whom the disbarred or
suspended lawyer practiced during the period on or after the date of the acts
which resulted in disbarment or suspension through and including the effective
date of disbarment or suspension.
Comment
[1] A lawyer may regularly practice law only in a
jurisdiction in which the lawyer is admitted to practice. The practice of law
in violation of lawyer-licensing standards of another jurisdiction constitutes
a violation of these Rules. This Rule does not restrict the ability of lawyers
authorized by federal statute or other federal law to represent the interests
of the United States or other persons in any jurisdiction.
[2] There are occasions in which lawyers admitted to practice in another
jurisdiction, but not in this jurisdiction, will engage in conduct in this
jurisdiction under circumstances that do not create significant risk to the
interests of their clients, the courts or the public. Paragraph (c) identifies
six situations in which the lawyer may engage in such conduct without fear of
violating this Rule. All such conduct is subject to the duty of competent
representation. See Rule 1.1. Rule 5.5 does not address the
question of whether other conduct constitutes the unauthorized practice of law.
The fact that conduct is not included or described in this Rule is not intended
to imply that such conduct is the unauthorized practice of law. With the
exception of paragraph (c)(2)(A) and (F), nothing in this Rule is intended to
authorize a lawyer to establish an office or other systematic and continuous
presence in this jurisdiction without being admitted to practice here. Presence
may be systematic and continuous even if the lawyer is not physically present
in this jurisdiction. Such a lawyer must not hold out to the public or otherwise
represent that the lawyer is admitted to practice law in this
jurisdiction. See also Rules 7.1(a) and 7.5(b). However, a
lawyer admitted to practice in another jurisdiction who is partner, shareholder
or employee of an interstate or international law firm that is registered with
the North Carolina State Bar pursuant to 27 N.C.A.C. 1E, Section .0200, may
practice, subject to the limitations of this Rule, in the North Carolina
offices of such law firm.
[3] Lawyers not admitted to practice generally in the jurisdiction may be
authorized by law or order of a tribunal or an administrative agency to appear
before a the tribunal or agency. Such authority may be
granted pursuant to formal rules governing admission pro hac
vice or pursuant to informal practice of the tribunal or agency. Under
paragraph (b)(1), a lawyer does not violate this Rule when the lawyer appears
before such a tribunal or agency. Nor does a lawyer violate this Rule when the
lawyer engages in conduct in anticipation of a proceeding or hearing, such as
factual investigations and discovery conducted in connection with a litigation
or administrative proceeding, in which an out-of-state lawyer has been admitted
or in which the lawyer reasonably expects to be admitted. Nothing in paragraph
(c)(1) is intended to authorize a lawyer not licensed in this jurisdiction to
solicit clients in this jurisdiction.
[4] When lawyers appear or anticipate appearing before
a tribunal or administrative agency with authority to admit the lawyer to
practice pro hac vice, their conduct is governed by
paragraphs (a) and (c)(1) and not by (c)(2). Paragraph (c)(2) authorizes a
lawyer to engage in certain conduct other than making or preparing for
appearances before such a tribunal. For example, paragraph (c)(2)(A) recognizes
that some clients hire a lawyer as an employee in circumstances that may make
it impractical for the lawyer to become admitted to practice in this
jurisdiction. Given that these clients are unlikely to be deceived about the
training and expertise of these lawyers, lawyers may act on behalf of such a
client without violating this Rule. The lawyer may also act on behalf of the
client's commonly owned organizational affiliates but only in connection with
the client's matters.
[5] Paragraph (c)(2)(B) recognizes that the complexity of many matters requires
that a lawyer whose representation of a client consists primarily of conduct in
a jurisdiction in which the lawyer is admitted to practice, also be permitted
to act on the client's behalf in other jurisdictions in matters arising out of
or otherwise reasonably related to the lawyer's representation of the client.
This conduct may involve negotiations with private parties, as well as
negotiations with government officers or employees, and participation in alternative
dispute-resolution procedures. This provision also applies when a lawyer is
conducting witness interviews or other activities in this jurisdiction in
preparation for a litigation or other proceeding that
will occur in another jurisdiction where the lawyer is either admitted
generally or expects to be admitted pro hac vice.
[6] Paragraph (c)(2)(C) permits a lawyer admitted to practice law in another
jurisdiction to perform services on a temporary basis in this jurisdiction if
those services are in or reasonably related to a pending or potential
arbitration, mediation, or other alternative dispute resolution proceeding in
this or another jurisdiction, if the services arise out of or are reasonably
related to the lawyer's practice in a jurisdiction in which the lawyer is
admitted to practice. The lawyer, however, must obtain admission pro hac vice in the case of a court-annexed arbitration or
mediation or otherwise if court rules or law so require.
[7] Paragraph (c)(2)(D) recognizes that association with a lawyer licensed to
practice in this jurisdiction is likely to protect the interests of both
clients and the public. The lawyer admitted to practice in this jurisdiction,
however, may not serve merely as a conduit for an out-of-state lawyer but must
actively participate in and share actual responsibility for the representation
of the client. If the admitted lawyer's involvement is merely pro forma, then
both lawyers are subject to discipline under this Rule.
[8] Paragraph (c)(2)(F) permits a lawyer who is awaiting admission
by comity to practice on a provisional and limited basis if certain
requirements are met. As used in this paragraph, the term "professional
relationship" refers to an employment or partnership arrangement.
[9] The definition of the practice of law is established by
N.C.G.S. ¤84-2.1. Limiting the practice of law to members of the bar protects
the public against rendition of legal services by unqualified persons.
Paragraph (d) does not prohibit a lawyer from employing the services of paraprofessionals
and delegating functions to them, so long as the lawyer supervises the
delegated work and retains responsibility for their work. See Rule
5.3.
[10] Lawyers may also provide professional advice and instruction to nonlawyers whose employment requires knowledge of law; for
example, claims adjusters, employees of financial or commercial institutions,
social workers, accountants and persons employed in government agencies. In
addition, a lawyer may counsel nonlawyers who wish to
proceed pro se .
[11] In the absence of statutory prohibitions or specific conditions placed on
a disbarred or suspended attorney in the order revoking or suspending the
license, such individual may be hired to perform the services of a law clerk or
legal assistant by a law firm with which he or she was not affiliated at the
time of or after the acts resulting in discipline. Such employment is, however,
subject to certain restrictions. A licensed attorney in the firm must take full
responsibility for, and employ independent judgment in, adopting any research,
investigative results, briefs, pleadings, or other documents or instruments
drafted by such individual. The individual may not directly advise clients or
communicate in person or in writing in such a way as to imply that he or she is
acting as an attorney or in any way in which he or she seems to assume
responsibility for a client's legal matters. The disbarred or suspended
attorney should have no communications or dealings with, or on behalf of,
clients represented by such disbarred or suspended attorneys or by any
individual or group of individuals with whom he or she practiced during the
period on or after the date of the acts which resulted in discipline through
and including the effective date of the discipline. Further, the employing
attorney or law firm should perform no services for clients represented by the
disbarred or suspended attorney during such period. Care should be taken to
ensure that clients fully understand that the disbarred or suspended attorney
is not acting as an attorney, but merely as a law clerk or lay employee. Under
some circumstances, as where the individual may be known to clients or in the
community, it may be necessary to make an affirmative statement or disclosure
concerning the disbarred or suspended attorney's status with the law firm.
Additionally, a disbarred or suspended attorney should be paid on some fixed
basis, such as a straight salary or hourly rate, rather than on the basis of
fees generated or received in connection with particular matters on which he or
she works. Under these circumstances, a law firm employing a disbarred or
suspended attorney would not be acting unethically and would not be assisting a
nonlawyer in the unauthorized practice of law.
[12] An attorney or law firm should not employ a disbarred or suspended
attorney who was associated with such attorney or firm at any time on or after
the date of the acts which resulted in the disbarment or
suspension through and including the time of the disbarment or suspension.
Such employment would show disrespect for the court or body
which disbarred or suspended the attorney. Such employment would also be
likely to be prejudicial to the administration of justice and would create an
appearance of impropriety. It would also be practically impossible for the
disciplined lawyer to confine himself or herself to activities not involving
the actual practice of law if he or she were employed in his or her former
office setting and obliged to deal with the same staff and clientele.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997
Amended March 1, 2003;
November 16, 2006
ETHICS OPINION NOTES
CPR 19.
House counsel for an insurance company may not represent an insured in
prosecuting a subrogation claim.
CPR 325. House counsel of a savings and loan association may not represent a
subsidiary of the savings and loan association acting as trustee for a deed of
trust in foreclosure.
CPR 326. House counsel for an insurance company may not represent the insured
in defense of a third party claim or in prosecution of a subrogation
claim.
RPC 9. House counsel for a
mortgage bank which originates loans but has no
proprietary interest of its own may not represent borrowers or lenders in
closing loans originated by his employer.
RPC 40. For the purposes of a real
estate transaction, an attorney may, with proper notice to the borrower,
represent only the lender, and the lender may prepare the closing
documents. See also RPC 41.
RPC 114. Attorneys may give legal
advice and drafting assistance to persons wishing to proceedpro
se without appearing as counsel of record.
RPC 139. A lawyer may not sign an
adoption petition prepared by an adoption agency as an accommodation to that
agency without undertaking professional responsibility for the adoption
proceeding.
RPC 151. Although a
corporate insurer acting through its employees cannot practice law and
appear on behalf of others, a lawyer who is a full-time employee of an
insurance company may represent the company in an action where the company is a
named party.
RPC 216. A lawyer may use the
services of a nonlawyer independent contractor to
search a title provided the nonlawyer is properly supervised by the lawyer.
98
Formal Ethics Opinion 7. Opinion rules that a law
firm may employ a disbarred lawyer as a paralegal provided the firm accepts no
new clients who were clients of the disbarred lawyer's former firm during the
period of misconduct; however, a disbarred lawyer may not work as a paralegal
at a firm where he was employed as a lawyer during the period of misconduct.
98
Formal Ethics Opinion 8. Opinion rules that a lawyer
may not participate in a closing or sign a preliminary title opinion if, after
reasonable inquiry, the lawyer believes that the title abstract or opinion was
prepared by a nonlawyer without supervision by a
licensed North Carolina lawyer.
99
Formal Ethics Opinion 6. Opinion examines the
ownership of a title insurance agency by lawyers in North and South
Carolina as well as the supervision of an independent paralegal.
2000
Formal Ethics Opinion 9. Opinion explores the
situations in which a lawyer who is also a CPA may provide legal services and
accounting services from the same office.
2000
Formal Ethics Opinion 10. Opinion rules that a lawyer
may have a nonlawyer employee deliver a message to a
court holding calendar call, if the lawyer is unable to attend due to a
scheduling conflict with another court or for another legitimate reason.
2002
Formal Ethics Opinion 9. Opinion rules that a nonlawyer assistant supervised by a lawyer may identify to
the client who is a party to such a transaction the documents to be executed
with respect to the transaction, direct the client as to the correct place on
each document to sign, and handle the disbursement of proceeds for a
residential real estate transaction, even though the supervising lawyer is not
physically present.
Authorized Practice
Advisory Opinion 2002-1. The North Carolina State Bar has been requested to interpret
the North Carolina unauthorized practice of law statutes (N.C. Gen.
Stat. ¤¤84-2.1 to 84-5) as they apply to residential real estate transactions.
The State Bar issues the following authorized practice of law advisory opinion
pursuant to N.C. Gen. Stat. ¤84-37(f) after careful consideration and
investigation. This opinion supersedes any prior opinions and decisions of any
standing committee of the State Bar interpreting the unauthorized practice of
law statutes to the extent those opinions and decisions are inconsistent with
the conclusions expressed herein.
CASE NOTES
A licensed attorney who is a full-time employee of an insurance company may not
ethically represent one of the company's insureds as
counsel of record in an action brought by a third party for a claim covered by
the terms of the insurance policy or appear as counsel of record for the
insured in the prosecution of a subrogation claim for property damage. Gardner v. North Carolina State Bar, 316 N.C. 285,
341 S.E.2d 517 (1986).
Law Firms and Associations
Rule 5.6
Restrictions on Right to Practice
A lawyer shall not participate
in offering or making:
(a) a partnership, shareholders, operating,
employment, or other similar type of agreement that restricts the right of a
lawyer to practice after termination of the relationship, except an agreement
concerning benefits upon retirement; or
(b) an agreement in which a restriction on the
lawyer's right to practice is part of the settlement of a controversy between
private parties.
Comment
[1] An agreement restricting the right of
lawyers to practice after leaving a firm not only limits their professional
autonomy but also limits the freedom of clients to choose a lawyer. Paragraph
(a) prohibits such agreements except for restrictions incident to provisions
concerning retirement benefits for service with the firm.
[2] Paragraph (b) prohibits a lawyer from
agreeing not to represent other persons in connection with settling a claim on
behalf of a client.
[3] This Rule does not prohibit restrictions
that may be included in the terms of the sale of a law practice pursuant to
Rule 1.17.
History Note: Statutory Authority G.
84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
RPC 13. A retirement agreement may require a lawyer to accept
inactive status as a member of the State Bar as a condition of payment of
retirement benefits.
RPC 179. A
lawyer may not offer or enter into a settlement agreement that contains a
provision barring the lawyer who represents the settling party from
representing other claimants against the opposing party.
2001 Formal Ethics Opinion 10. Opinion prohibits a lawyer from entering into an
employment agreement with a law firm that includes a provision reducing the
amount of deferred compensation the lawyer will receive if the lawyer leaves
the firm before retirement to engage in the private practice of law within a
50-mile radius of the firm's offices.
Law Firms and Associations
Rule 5.7
Responsibilities Regarding Law-Related Services
(a) A lawyer shall be subject to the Rules of Professional Conduct
with respect to the provision of law-related services, as defined in paragraph
(b), if the law-related services are provided:
(1) by
the lawyer in circumstances that are not distinct from the lawyer's provision
of legal services to clients; or
(2) by a separate entity controlled by the lawyer individually or with others
if the lawyer fails to take reasonable measures to assure that a person
obtaining the law-related services knows that the services of the separate
entity are not legal services and that the protections of the client-lawyer
relationship do not exist.
(b) The term "law-related services" denotes services
that might reasonably be performed in conjunction with and in substance are
related to the provision of legal services, and that are not prohibited as
unauthorized practice of law when provided by a nonlawyer.
Comment
[1] A broad range of economic and other interests of
clients may be served by lawyers' engaging in the delivery of law-related
services. Examples of law-related services include providing financial
planning, accounting, trust services, real estate counseling, legislative
lobbying, economic analysis, social work, psychological counseling, tax
preparation, and patent, medical or environmental consulting.
[2] When a lawyer performs law-related services or controls an organization
that does so, there exists the potential for ethical problems. Principal among
these is the possibility that the person for whom the law-related services are
performed fails to understand that the services may not carry with them the
protections normally afforded as part of the client-lawyer relationship. The
recipient of the law-related services may expect, for example, that the
protection of client confidences, prohibitions against representation of
persons with conflicting interests, and obligations of a lawyer to maintain
professional independence apply to the provision of law-related services when
that may not be the case.
[3] Rule 5.7 applies to the provision of law-related services by a lawyer even
when the lawyer does not provide any legal services to the person for whom the
law-related services are performed. The Rule identifies the circumstances in
which all of the Rules of Professional Conduct apply to the provision of
law-related services. Even when those circumstances do not exist, however, the
conduct of a lawyer involved in the provision of law-related services is
subject to those Rules that apply generally to lawyer conduct, regardless of
whether the conduct involves the provision of legal services. See , e.g., Rule 8.4.
[4] When law-related services are provided by a lawyer under circumstances that
are not distinct from the lawyer's provision of legal services to clients, the
lawyer in providing the law-related services must adhere to the requirements of
the Rules of Professional Conduct as provided in Rule 5.7(a)(1).
[5] Law-related services also may be provided through an entity that is
distinct from that through which the lawyer provides legal services. If the
lawyer individually or with others has control of such an entity's operations,
the Rule requires the lawyer to take reasonable measures to assure that each
person using the services of the entity knows that the services provided by the
entity are not legal services and that the Rules of Professional Conduct that
relate to the client-lawyer relationship do not apply. A lawyer's control of an
entity extends to the ability to direct its operation. Whether a lawyer has
such control will depend upon the circumstances of the particular case.
[6] When a client-lawyer relationship exists with a
person who is referred by a lawyer to a separate law-related service entity
controlled by the lawyer, individually or with others, the lawyer must comply
with Rule 1.8(a).
[7] In taking the reasonable measures referred to in paragraph (a)(2) to assure
that a person using law-related services understands the practical effect or
significance of the inapplicability of the Rules of Professional Conduct, the
lawyer should communicate to the person receiving the law-related services, in
a manner sufficient to assure that the person understands the significance of
the fact, that the relationship of the person to the business entity will not
be a client-lawyer relationship. The communication should be made before
entering into an agreement for provision of or providing law-related services,
and preferably should be in writing.
[8] The burden is upon the lawyer to show that the lawyer has taken reasonable
measures under the circumstances to communicate the desired understanding. For
instance, a sophisticated user of law-related services, such as a publicly held
corporation, may require a lesser explanation than someone unaccustomed to
making distinctions between legal services and law-related services, such as an
individual seeking tax advice from a lawyer-accountant or investigative
services in connection with a lawsuit.
[9] Regardless of the sophistication of potential recipients of law-related
services, a lawyer should take special care to keep separate the provision of
law-related and legal services in order to minimize the risk that the recipient
will assume that the law-related services are legal services. The risk of such
confusion is especially acute when the lawyer renders both types of services
with respect to the same matter. Under some circumstances the legal and
law-related services may be so closely entwined that they cannot be
distinguished from each other, and the requirement of disclosure and consultation
imposed by paragraph (a)(2) of the Rule cannot be met. In such a case a lawyer
will be responsible for assuring that both the lawyer's conduct and, to the
extent required by Rule 5.3, that of nonlawyer
employees in the distinct entity that the lawyer controls complies in all
respects with the Rules of Professional Conduct.
[10] When a lawyer is obliged to accord the recipients of such services the
protections of those Rules that apply to the client-lawyer relationship, the
lawyer must take special care to heed the proscriptions of the Rules addressing
conflict of interest (Rules 1.7 through 1.11, especially Rules 1.7(a)(2) and
1.8(a), (b) and (f)), and scrupulously to adhere to the requirements of Rule
1.6 relating to disclosure of confidential information. The promotion of the
law-related services must also in all respects comply with Rules 7.1 through
7.3, dealing with advertising and solicitation.
[11] When the full protections of all of the Rules of Professional Conduct do
not apply to the provision of law-related services, principles of law external
to the Rules, for example, the law of principal and agent, govern the legal
duties owed to those receiving the services. Those other legal principles may
establish a different degree of protection for the recipient with respect to
confidentiality of information, conflicts of interest and permissible business
relationships with clients. See also Rule 8.4 (Misconduct).
History Note: Statutory Authority G. 84-23
Adopted March 1, 2003.
ETHICS OPINION NOTES
RPC 238.
Opinion rules that a lawyer is subject to the Rules of Professional Conduct
with respect to the provision of a law related service, such as financial
planning, if the law related service is provided in circumstances that are not
distinct from the lawyer's provision of legal services to clients.
2000
Formal Ethics Opinion 9. Opinion explores the
situations in which a lawyer who is also a CPA may provide legal services and
accounting services from the same office.
2001
Formal Ethics Opinion 9. Opinion rules that, although
a lawyer may recommend the purchase of a financial product to a legal client,
the lawyer may not receive a commission for its sale.
2010
Formal Ethics Opinion 13. A lawyer may receive a fee
or commission in exchange for providing financial services and products to a
legal client so long as the lawyer complies with the ethical rules pertaining
to the provision of law-related services, business transactions with clients,
and conflicts of interest.
Public Service
Rule 6.1
Voluntary Pro Bono Publico Service
Every lawyer has a professional responsibility to provide legal
services to those unable to pay. A lawyer should aspire to render at least (50)
hours of pro bono publico legal services per year. In
fulfilling this responsibility, the lawyer should:
(a) provide a substantial majority of the
(50) hours of legal services without fee or expectation of fee to:
(1) persons
of limited means;
(2) charitable,
religious, civic, community, governmental and educational organizations in
matters that are designed primarily to address the needs of persons of limited
means; or
(3) individuals,
groups or organizations seeking to secure or protect civil rights, civil
liberties or public rights, or charitable, religious, civic, community,
governmental and educational organizations in matters in furtherance of their
organizational purposes, where the payment of standard legal fees would
significantly deplete the organization's economic resources or would be
otherwise inappropriate
(b) provide any additional services
through:
(1) the
delivery of legal services described in paragraph (a) at a substantially
reduced fee; or
(2) participation
in activities for improving the law, the legal system or the legal profession.
In addition, a lawyer should voluntarily contribute financial
support to organizations that provide legal services to persons of limited
means.
Comment
[1] Every lawyer, regardless of professional prominence or
professional work load, has a responsibility to provide legal services to those
unable to pay, and personal involvement in the problems of the disadvantaged
can be one of the most rewarding experiences in the life of a lawyer. The North
Carolina State Bar urges all lawyers to provide a minimum of 50 hours of pro
bono services annually. It is recognized that in some years a lawyer may render
greater or fewer hours than the annual standard specified, but during the
course of his or her legal career, each lawyer should render on average per
year the number of hours set forth in this Rule. Services can be performed in
civil matters or in criminal or quasi-criminal matters for which there is no
government obligation to provide funds for legal representation, such as
post-conviction death penalty appeal cases.
[2] The critical need for legal services
among persons of limited means is recognized in paragraphs (a)(1) and (2) of
the Rule. Legal services to persons of limited means consists of a full range of
activities, including individual and class representation, the provision of
legal advice, legislative lobbying, administrative rule making and the
provision of free training or mentoring to those who represent persons of
limited means. The variety of these activities should facilitate participation
by government lawyers, even when restrictions exist on their engaging in the
outside practice of law.
[3] Persons eligible for legal services under paragraphs (a)(1)
and (2) are those who qualify for participation in programs funded by the Legal
Services Corporation and those whose incomes and financial resources are
slightly above the guidelines utilized by such programs but, nevertheless,
cannot afford counsel. Legal services can be rendered to individuals or to
organizations such as homeless shelters, battered women's centers and food
pantries that serve those of limited means. The term "governmental
organizations" includes, but is not limited to, public protection programs
and sections of governmental or public sector agencies.
[4] Because service must be provided without fee or expectation of
fee, the intent of the lawyer to render free legal services is essential for
the work performed to fall within the meaning of paragraph (a). Accordingly,
services rendered cannot be considered pro bono if an anticipated fee is
uncollected, but the award of statutory attorneys' fees in a case originally
accepted as pro bono would not disqualify such services from inclusion under
this section. Lawyers who do receive fees in such cases are encouraged to
contribute an appropriate portion of such fees to organizations described in
paragraphs (a)(2) and (3).
[5] Constitutional, statutory or regulatory restrictions may
prohibit or impede government and public sector lawyers and judges from
performing the pro bono services outlined in paragraphs (a)(1), (2), and (3),
and (b) (1). Accordingly, where those restrictions apply, government and public
sector lawyers and judges may fulfill their pro bono responsibility by
performing services outlined in paragraph (b)(2).
Such lawyers and judges are not expected to undertake the reporting outlined in
paragraph twelve of this Comment.
[6] Paragraph (a)(3) includes the provision of certain types of
legal services to those whose incomes and financial resources place them above
limited means. Examples of the types of issues that may be addressed under this
paragraph include First Amendment claims, Title VII claims and environmental
protection claims. Additionally, a wide range of organizations may be
represented, including social service, medical research, cultural
and religious groups.
[7] Paragraph (b)(1) covers instances in which lawyers agree to
and receive a modest fee for furnishing legal services to persons of limited
means. Participation in judicare programs and
acceptance of court appointments in which the fee is substantially below a
lawyer's usual rate are encouraged under this section.
[8] Paragraph (b)(2) recognizes the value of lawyers engaging in
activities that improve the law, the legal system or the legal profession.
Serving on bar association committees; serving on boards of pro bono or legal
services programs; taking part in Law Day activities; acting as a continuing
legal education instructor, a mediator or an arbitrator; and engaging in
legislative lobbying to improve the law, the legal system or the profession are
a few examples of the many activities that fall within this paragraph.
[9] Because the efforts of individual lawyers are not enough to
meet the need for free legal services that exists among persons of limited
means, the government and the profession have instituted additional programs to
provide those services. Every lawyer should financially support such programs,
in addition to either providing direct pro bono services or making financial
contributions when pro bono service is not feasible.
[10] Law firms should act reasonably to enable and encourage all
lawyers in the firm to provide the pro bono legal services called for by this
Rule.
[11] The responsibility set forth in this Rule is
not intended to be enforced through disciplinary process.
[12] Lawyers are encouraged to report pro bono legal services to
Legal Aid of North Carolina, the North Carolina Equal Access to Justice
Commission, or other similar agency as appropriate in order that such service
might be recognized and serve as an inspiration to others.
History Note: Statutory Authority G. 84-23
Adopted
January 28, 2010
Rule 6.2 Reserved
Public Service
Rule 6.3 Membership in Legal
Services Organization
A lawyer may serve as a director, officer or member of a legal services
organization, apart from the law firm in which the lawyer practices,
notwithstanding that the organization serves persons having interests adverse
to a client of the lawyer. The lawyer shall not knowingly participate in a
decision or action of the organization:
(a) if participating in the decision or action
would be incompatible with the lawyer's obligations to a client under Rule 1.7;
or
(b) where the decision or action could have a
material adverse effect on the representation of a client of the organization
whose interests are adverse to a client of the lawyer.
Comment
[1] Lawyers should be encouraged to support and
participate in legal service organizations. A lawyer who is an officer or a
member of such an organization does not thereby have a client-lawyer
relationship with persons served by the organization. However, there is potential
conflict between the interests of such persons and the interests of the
lawyer's clients. If the possibility of such conflict disqualified a lawyer
from serving on the board of a legal services organization, the profession's
involvement in such organizations would be severely curtailed.
[2] It may be necessary in appropriate cases to
reassure a client of the organization that the representation will not be
affected by conflicting loyalties of a member of the board. Established,
written policies in this respect can enhance the credibility of such
assurances.
History Note: Statutory Authority G.
84-23
Adopted July 24, 1997.
ETHICS OPINION NOTES
CPR 68. An attorney may serve on the board of a legal aid society and represent
a client against a party represented by a legal aid lawyer.
Public Service
Rule 6.4 Law
Reform Activities Affecting Client Interests
A lawyer may serve as a
director, officer or member of an organization involved in reform of the law or
its administration notwithstanding that the reform may affect the interests of
a client of the lawyer. When the lawyer knows that the interests of a client
may be materially benefited by a decision in which the lawyer participates, the
lawyer shall disclose that fact but need not identify the client.
Comment
[1] Lawyers involved in organizations seeking
law reform generally do not have a client-lawyer relationship with the
organization. Otherwise, it might follow that a lawyer could not be involved in
a bar association law reform program that might indirectly affect a
client. See also Rule 1.2(b). For example, a lawyer concentrating in antitrust litigation
might be regarded as disqualified from participating in drafting revisions of
rules governing that subject. In determining the nature and scope of
participation in such activities, a lawyer should be mindful of obligations to
clients under other Rules, particularly Rule 1.7. A lawyer is professionally
obligated to protect the integrity of the program by making an appropriate
disclosure within the organization when the lawyer knows a private client might
be materially benefited.
History Note: Statutory Authority G.
84-23
Adopted July 24, 1997; Amended March 1, 2003.
Public Service
Rule 6.5
Limited Legal Services Programs
(a) A lawyer who, under the auspices of a program sponsored by a
nonprofit organization or court, provides short-term limited legal services to
a client without expectation by either the lawyer or the client that the lawyer
will provide continuing representation in the matter:
(1) is
subject to Rules 1.7 and 1.9(a) only if the lawyer knows that the
representation of the client involves a conflict of interest; and
(2) is subject to Rule 1.10 only if the lawyer knows that another lawyer
associated with the lawyer in a law firm is disqualified by Rule 1.7 or 1.9(a)
with respect to the matter.
(b) Except as provided in paragraph (a)(2), Rule 1.10 is
inapplicable to a representation governed by this Rule.
Comment
[1] Legal services organizations, courts and various nonprofit organizations
have established programs through which lawyers provide short-term limited
legal services - such as advice or the completion of legal forms - that will
assist persons to address their legal problems without further representation
by a lawyer. In these programs, such as legal-advice hotlines, advice-only
clinics or pro se counseling programs, a client-lawyer relationship is
established, but there is no expectation that the lawyer's representation of
the client will continue beyond the limited consultation. Such programs are
normally operated under circumstances in which it is not feasible for a lawyer
to systematically screen for conflicts of interest as is generally required
before undertaking a representation. See, e.g. , Rules 1.7, 1.9 and 1.10.
[2] A lawyer who provides short-term limited legal services pursuant to this
Rule must secure the client's informed consent to the limited scope of the
representation. See Rule 1.2(c). If a short-term limited
representation would not be reasonable under the circumstances, the lawyer may
offer advice to the client but must also advise the client of the need for
further assistance of counsel. Except as provided in this Rule, the Rules of Professional
Conduct, including Rules 1.6 and 1.9(c), are applicable to the limited
representation.
[3] Because a lawyer who is representing a client in the circumstances
addressed by this Rule ordinarily is not able to check systematically for
conflicts of interest, paragraph (a) requires compliance with Rules 1.7 or
1.9(a) only if the lawyer knows that the representation presents a conflict of
interest for the lawyer, and with Rule 1.10 only if the lawyer knows that
another lawyer in the lawyer's firm is disqualified by Rules 1.7 or 1.9(a) in
the matter.
[4] Because the limited nature of the services significantly reduces the risk
of conflicts of interest with other matters being handled by the lawyer's firm,
paragraph (b) provides that Rule 1.10 is inapplicable to a representation
governed by this Rule except as provided by paragraph (a)(2). Paragraph (a)(2)
requires the participating lawyer to comply with Rule 1.10 when the lawyer
knows that the lawyer's firm is disqualified by Rules 1.7 or
1.9(a). By virtue of paragraph (b), however, a lawyer's participation in
a short-term limited legal services program will not preclude the lawyer's firm
from undertaking or continuing the representation of a client with interests
adverse to a client being represented under the program's auspices. Nor will
the personal disqualification of a lawyer participating in the program be
imputed to other lawyers participating in the program.
[5] If, after commencing a short-term limited
representation in accordance with this Rule, a lawyer undertakes to represent
the client in the matter on an ongoing basis, Rules 1.7, 1.9(a) and 1.10 become
applicable.
History Note: Statutory Authority G. 84-23
Public Service
Rule 6.6 Action as a
Public Official
A lawyer who holds public
office shall not:
(a) use his or her public position to obtain, or
attempt to obtain, a special advantage in legislative matters for himself or
herself or for a client under circumstances where the lawyer knows, or it is
obvious, that such action is not in the public interest;
(b) use his or her public position to influence,
or attempt to influence, a tribunal to act in favor of himself or herself or
his or her client; or
(c) accept anything of value from any person
when the lawyer knows or it is obvious that the offer is for the purpose of
influencing the lawyer's action as a public official.
Comment
[1] Lawyers often serve as legislators or as
holders of other public offices. This is highly desirable, as lawyers are
uniquely qualified to make significant contributions to the improvement of the
legal system. A lawyer who is a public officer, whether full or part time,
should not engage in activities in which the lawyer's personal or professional
interests are or foreseeably may be in conflict with his or her official
duties.
History Note: Statutory Authority G.
84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 177. An attorney on the county board of health may not represent a client
before such board, but he may resign and represent the client if he acquired no
relevant confidential information while on the board.
CPR 189. An attorney member of the city council
with control over the police department may not represent a criminal defendant
when a police officer is a prosecuting witness.
CPR 231. An attorney-legislator may represent a
criminal defendant when a State highway patrolman is the prosecuting witness.
CPR 233. An attorney member of the city council
with control over the police department may not represent a criminal defendant
when a police officer is a prosecuting witness even if he withdraws from
consideration of the budget.
CPR 263. An emergency judge may not practice
law.
CPR 290. An
attorney who serves as a member of a county or municipal governing board, or
State or federal legislative body, or any entity thereunder, or committee
thereof, shall not hear or consider any matter coming before that governing body
or entity in which that member or his firm has any direct or indirect
interest.
Pursuant to such prohibition, it shall be
unethical for that member to attempt to influence in any way, publicly or
privately, the actions or decisions of the governing body or entity or its
staff with respect to any matter on which his partner or associate is
appearing.
If an attorney or his employee serves as a
member of a county or municipal governing board, or State or federal
legislative body of any entity thereunder, or committee thereof, it shall be
unethical for his partner, associate or employer to represent such governing
body or entity.
It is not unethical as such for an attorney
whose spouse or relative is on any county or municipal governing board, or
State or federal legislative body, or any entity thereunder, or committee
thereof, to appear before or represent that governing body or entity. However,
it is unethical for an attorney to use his relationship to a member of any
governing board to gain (or retain) employment or obtain favorable decisions. ( But see RPC 130)
CPR 327. An attorney who serves on per diem
basis as a hearing examiner for a public agency may not participate in hearings
on behalf of clients before other examiners. His partners and associates may
not appear before him, but may appear before other hearing examiners. If the
attorney-examiner is appointed to the full board he may not appear before the
board under any conditions. His partners should abide by CPR 290.
CPR 335. An attorney-magistrate may privately
practice law. He may not appear in any criminal case, in any civil case
originating in the small claims court in his county, or in any case with which
he had any connection as a magistrate.
CPR 360. An attorney may counsel a
quasi-judicial board and also act as a hearing examiner rendering decisions
appealable to the same board during the same time span, but may not act in both
capacities in the same case.
RPC 53.
Opinion rules that a lawyer may sue a municipality although his partner serves
as a member of its governing body.
RPC 63. An
attorney may represent the school board while serving as a county commissioner
with certain restrictions.
RPC 73.
Opinion clarifies two lines of authority in prior ethics opinions. Where an
attorney serves on a governing body, such as a county commission, the attorney
is disqualified from representing criminal defendants where a member of the
sheriff's department is a prosecuting witness. The attorney's partners are not
disqualified.
Where an attorney advises a governing body, such
as a county commission, but is not a commissioner herself, and in that capacity
represents the sheriff's department relative to criminal matters, the attorney
may not represent criminal defendants if a member of the sheriff's department
will be a prosecuting witness. In this situation the attorney's partners would
also be disqualified from representing the criminal defendants.
RPC 95. An
assistant district attorney may prosecute cases while serving on the school
board.
RPC 105. A
public defender may represent criminal defendants while serving on the school
board.
RPC 130. An
attorney may accept employment on behalf of a governing board upon which his or
her partner sits if such is otherwise lawful.
2002 Formal Ethics Opinion 2. Opinion rules that a lawyer may represent a
party suing a public body or non-profit organization, although the lawyer's
partner or associate serves on the board, subject to certain conditions.
Information About Legal Services
Rule 7.1
Communications Concerning a Lawyer's Services
(a) A lawyer shall not make a false or misleading communication
about the lawyer or the lawyer's services. A communication is false or
misleading if it:
(1) contains
a material misrepresentation of fact or law, or omits a fact necessary to make
the statement considered as a whole not materially misleading;
(2) is likely to create an unjustified expectation about results the lawyer can
achieve, or states or implies that the lawyer can achieve results by means that
violate the Rules of Professional Conduct or other law; or
(3) compares the lawyer's services with other lawyers' services, unless the
comparison can be factually substantiated.
(b) A communication by a lawyer that contains a dramatization
depicting a fictional situation is misleading unless it complies with paragraph
(a) above and contains a conspicuous written or oral statement, at the beginning
and the end of the communication, explaining that the communication contains a
dramatization and does not depict actual events or real persons.
Comment
[1] This Rule governs all communications about a lawyer's services, including
advertising permitted by Rule 7.2. Whatever means are used to make known a
lawyer's services, statements about them must be truthful.
[2] Truthful statements that are misleading are also prohibited by this Rule. A
truthful statement is misleading if it omits a fact necessary to make the
lawyer's communication considered as a whole not materially misleading. A
truthful statement is also misleading if there is a substantial likelihood that
it will lead a reasonable person to formulate a specific conclusion about the
lawyer or the lawyer's services for which there is no reasonable factual
foundation.
[3] An advertisement that truthfully reports a lawyer's achievements on behalf
of clients or former clients may be misleading if presented so as to lead a
reasonable person to form an unjustified expectation that the same results
could be obtained for other clients in similar matters without reference to the
specific factual and legal circumstances of each client's case. Similarly, an
unsubstantiated comparison of the lawyer's services or fees with the services
or fees of other lawyers may be misleading if presented with such specificity
as would lead a reasonable person to conclude that the comparison can be
substantiated. The inclusion of an appropriate disclaimer or qualifying language
may preclude a finding that a statement is likely to create unjustified
expectations or otherwise mislead a prospective client.
[4] See also Rule 8.4(e) for
the prohibition against stating or implying an ability to influence improperly
a government agency or official or to achieve results by means that violate the
Rules of Professional Conduct or other law.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 253. A paralegal employed by a law firm may have a business card
with the firm's identification.
CPR 262. A law firm's office manager may have a business card with the firm's
identification.
RPC 5. An attorney holding a Juris Doctor degree may not on that basis refer to himself
or herself as a "Doctor."
RPC 135. An attorney may not
participate in a private lawyer referral service which
advertises that its participants are "the best."
RPC 161. A television commercial for
legal services which fails to mention that bankruptcy
is the debt relief described in the commercial and describes results obtained
for others is misleading.
RPC 217. A local or remote call
forwarding telephone number may not be included in an advertisement for legal
services disseminated in a community where the law firm has neither an office
nor a lawyer present in the community unless an explanation is included in the
advertisement.
RPC 239. A lawyer may display
truthful information about the lawyer's legal services on a World Wide Web site
accessed via the Internet.
RPC 241. A lawyer may participate in
a directory of lawyers on the Internet if the information about the lawyer in
the directory is truthful.
97
Formal Ethics Opinion 6. The omission of the lawyer's
address from a targeted direct mail letter is a material misrepresentation.
99
Formal Ethics Opinion 7. Opinion rules that a law
firm may not state in a direct mail letter that lawyers in the firm have
obtained jury verdicts of specified amounts because the statement may create
unjustified expectations about the results the lawyers can achieve.
2000
Formal Ethics Opinion 1. Opinion rules that, in the
absence of a full explanation, advertising a lawyer's or a law firm's record in
obtaining favorable verdicts is misleading and prohibited.
2000
Formal Ethics Opinion 3. Opinion rules that a lawyer
may respond to an inquiry posted on a web page message board provided there are
certain disclosures.
2000
Formal Ethics Opinion 6. Opinion rules that a
television advertisement for legal services that implies that an insurance
company will settle a claim more quickly because the advertised lawyer
represents the claimant is misleading.
2000
Formal Ethics Opinion 9. Opinion explores the
situations in which a lawyer who is also a CPA my provide
legal services and accounting services from the same office.
2004
Formal Ethics Opinion 7. Opinion rules that it is
misleading to advertise the number of years of experience of the lawyers with a
firm without indicating that it is the combined legal experience of all of the
lawyers with the firm.
2004
Formal Ethics Opinion 8. Opinion rules that
unless the lawyer invariably makes the repayment of costs advanced contingent
upon the outcome of each matter, an advertisement for legal services that
states that there is no fee unless there is a recovery must also state that
costs advanced must be repaid at the conclusion of the matter.
2004
Formal Ethics Opinion 9. Opinion rules that a
trade name for a law firm that implies an affiliation with a financial planning
company is misleading and prohibited.
2005
Formal Ethics Opinion 2. Opinion
rules that a law firm that employs a nonlawyer to
represent Social Security claimants must so disclose in any advertising for
this service and to prospective clients.
2005
Formal Ethics Opinion 14. Opinion rules that the
URL for a law firm website does not have to include words that identify the
site as belonging to a law firm provided the URL is not otherwise misleading.
2009
Formal Ethics Opinion 16. A law firm website may
include a case summary section showcasing successful verdicts and settlements
if the section contains accurate information accompanied by an appropriate
disclaimer. Any reference on the website to membership in an organization with
a self-laudatory name must comply with the requirements of 2003 Formal Ethics Opinion
3.
2010
Formal Ethics Opinion 4. A lawyer may be included in
a barter exchange trading network list or directory of members and other
advertisements to members of the barter exchange so long as the list,
directory, or advertisement does not include information that is false or
misleading.
2010
Formal Ethics Opinion 6. A lawyer may place an
advertisement for employment in practice areas in which the lawyer does not
have experience if the lawyer intends to obtain competence through study or by
associating a lawyer who is competent in those areas of law. If, at the time
the advertisement is placed, it is likely the lawyer will associate more
experienced lawyers to handle the resulting cases, that fact must be disclosed
to the public in the advertisement.
2010
Formal Ethics Opinion 9. A dramatization disclaimer
is not required when using a stock photograph in an advertisement so long as,
in the context of the advertisement, the stock photograph is not materially
misleading.
2010
Formal Ethics Opinion 10. A law firm may charge a
client for the expenses associated with an out-of-office consultation so long
as advertisements referencing the service indicate that the client will be
charged for the service and the client consents to the charge prior to the
visit.
2010
Formal Ethics Opinion 11. A lawyer may list membership
in an organization with a self-laudatory name on his letterhead if a disclaimer
of similar results and information about the criteria for membership also
appears on the letterhead.
2011
Formal Ethics Opinion 9 . A lawyer may not allow a
person who is not employed by or affiliated with the lawyerÕs firm to use firm
letterhead.
2011
Formal Ethics Opinion 10. A lawyer may advertise on a
website that offers daily discounts to consumers where the website companyÕs
compensation is a percentage of the amount paid to the lawyer if certain
disclosures are made and certain conditions are satisfied.
CASE NOTES
First Amendment challenge to N.C. State Bar ethics opinion 2000 FEO 6 ruling
that a television advertisement called "Strategy Session" violated
Rule 7.1. The court rejected the First Amendment challenge and found the
advertisement to be inherently misleading. The court reasoned that the
advertisement's portrayal of the insurance industry constituted a material
misrepresentation of fact and omitted facts necessary to make the advertisement,
when considered as a whole, not materially misleading. The ad also created an
unjustified expectation that the lawyers advertised could obtain settlements
without regard to the facts underlying a claim based solely on their reputation
and insurance companies' fear or reluctance to litigate against them. Farrin et al. v.
Thigpen et al., 173 F. Supp. 2d 427 (M.D.N.C. 2001).
Information About Legal Services
(a) Subject to
the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through
written, recorded or electronic communication, including public media.
(b) A lawyer shall not give anything of value to a person for recommending the
lawyer's services except that a lawyer may
(1)
pay the reasonable costs of advertisements or
communications permitted by this Rule;
(2) pay the usual charges of a not-for-profit lawyer referral service that
complies with Rule 7.2(d), or a prepaid or group legal services plan that
complies with Rule 7.3(d); and
(3) pay for a law practice in accordance with Rule 1.17.
(c) Any
communication made pursuant to this rule, other than that of a lawyer referral
service as described in paragraph (d), shall include the name and office
address of at least one lawyer or law firm responsible for its content.
(d) A lawyer may participate in a lawyer referral service subject to the
following conditions:
(1)
the lawyer is professionally responsible for its
operation including the use of a false, deceptive, or misleading name by the
referral service;
(2)
the referral service is not operated for a profit;
(3) the lawyer may pay to the lawyer referral service only a reasonable sum
which represents a proportionate share of the referral service's administrative
and advertising costs;
(4) the lawyer does not directly or indirectly receive anything of value other
than legal fees earned from representation of clients referred by the service;
(5) employees of the referral service do not initiate contact with prospective
clients and do not engage in live telephone or in-person solicitation of
clients;
(6) the referral service does not collect any sums from clients or potential
clients for use of the service; and
(7) all advertisements by the lawyer referral service shall:
(A)
state that a list of all participating lawyers will be
mailed free of charge to members of the public upon request and state where
such information may be obtained; and
(B)
explain the method by which the needs of the
prospective client are matched with the qualifications of the recommended
lawyer.
Comment
[1] To assist the public in obtaining legal services, lawyers are permitted to make known their services not only through
reputation but also through organized information campaigns in the form of
advertising. Advertising involves an active quest for clients, contrary to the
tradition that a lawyer should not seek clientele. However, the public's need
to know about legal services can be fulfilled in part through advertising. This
need is particularly acute in the case of persons of moderate means who have
not made extensive use of legal services. The interest in expanding public
information about legal services ought to prevail over considerations of
tradition. Nevertheless, advertising by lawyers may entail the risk of
practices that are misleading or overreaching.
[2] This Rule permits public dissemination of information concerning a lawyer's
name or firm name, address and telephone number; the kinds of services the
lawyer will undertake; the basis on which the lawyer's fees are determined,
including prices for specific services and payment and credit arrangements; a
lawyer's foreign language ability; names of references and, with their consent,
names of clients regularly represented; and other information that might invite
the attention of those seeking legal assistance.
[3] Questions of effectiveness and taste in advertising are matters of
speculation and subjective judgment. Television is now one of the most powerful
media for getting information to the public, particularly persons of low and
moderate income; prohibiting television advertising, therefore, would impede
the flow of information about legal services to many sectors of the public.
Limiting the information that may be advertised has a similar effect and
assumes that the bar can accurately forecast the kind of information that the
public would regard as relevant. But see Rule 7.1(b) for the disclaimer
required in any advertisement that contains a dramatization. Electronic media,
such as the Internet, can be an important source of information about legal
services, and lawful communication by electronic mail is permitted by this
Rule. But see Rule 7.3(a) for the prohibition against the solicitation of a
prospective client through a real-time electronic exchange that is not
initiated by the prospective client.
[4] Neither this Rule nor Rule 7.3 prohibits communications authorized by law,
such as notice to members of a class in class action litigation.
Paying Others to Recommend a Lawyer
[5] Lawyers are not permitted to pay others for channeling professional
work. Paragraph (b)(1), however, allows a lawyer to pay for advertising and
communications permitted by this Rule, including the costs of print directory
listings, on-line directory listings, newspaper ads, television and radio
airtime, domain-name registrations, sponsorship fees, banner ads, and group
advertising. A lawyer may compensate employees, agents and vendors who are
engaged to provide marketing or client-development services, such as
publicists, public-relations personnel, business-development staff and website
designers. See Rule 5.3 for the duties of lawyers and law
firms with respect to the conduct of nonlawyers who
prepare marketing materials for them.
[6] A lawyer may pay the usual charges of a prepaid or group legal services
plan or a not-for-profit lawyer referral service. A legal services plan is
defined in Rule 7.3(d). Such a plan assists prospective clients to secure legal
representation. A lawyer referral service, on the other hand, is any
organization that holds itself out to the public as a lawyer referral service.
Such referral services are understood by laypersons to be consumer-oriented
organizations that provide unbiased referrals to lawyers with appropriate experience
in the subject matter of the representation and afford other client
protections, such as complaint procedures or malpractice insurance
requirements. Consequently, this Rule only permits a lawyer to pay the usual
charges of a not-for-profit lawyer referral service.
[7] A lawyer who accepts assignments or referrals from a prepaid or group legal
service plan or referrals from a lawyer referral service must act reasonably to
assure that the activities of the plan or service are compatible with the lawyer's
professional obligations. See Rule 5.3. Any lawyer who
participates in a legal services plan or lawyer referral service is
professionally responsible for the operation of the service in accordance with
these rules regardless of the lawyer's knowledge, or lack of knowledge, of the
activities of the service. Legal service plans and lawyer referral services may
communicate with prospective clients, but such communication must be in
conformity with these Rules. Thus, advertising must not be false or misleading,
as would be the case if the communications of a group advertising program or a
group legal services plan would mislead prospective clients to think that it
was a lawyer referral service sponsored by a state agency or bar association.
The term "referral" implies that some attempt is made to match the
needs of the prospective client with the qualifications of the recommended
lawyer. To avoid misrepresentation, paragraph (d)(7)(B) requires that every
advertisement for the service must include an explanation of the method by
which a prospective client is matched with the lawyer to whom he or she is
referred. In addition, the lawyer may not allow in-person, telephonic, or
real-time contacts that would violate Rule 7.3.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 14. A lawyer may not perform title examinations and legal work for a
developer for free or for a substantially reduced fee as consideration for the
developer's promise to recommend the lawyer to prospective purchasers and their
lenders.
CPR 39. A lawyer may participate in a call-in radio program and answer legal
questions.
CPR 40. It is unethical for lawyers to offer free legal services to employees
of a savings and loan association to get title work.
CPR 58. An attorney may write and publish pamphlets of a legal nature and offer
them for sale to the public.
CPR 116. An attorney may write legal articles for publication in business
journals and be identified.
CPR 336. An attorney may advertise that he or she is also in the securities
business and the insurance business.
CPR 359. Attorneys may share the cost of advertising by means of a private
lawyer referral service under certain conditions.
RPC 10. Attorney may affiliate with a private
lawyer referral service administered by a for-profit business corporation so
long as the corporation does not profit from the referrals. ( But
see Rule 7.2(d)(2).)
RPC 94. A private lawyer referral service must
have more than one participating lawyer and all participants must share in the
cost of operating the referral service. ( But
see Rule 7.2 (d)(2).)
RPC 115. A lawyer may sponsor truthful legal information which is provided by telephone to members of the
public.
RPC 135. An attorney may not participate in a
private lawyer referral service unless all advertisements of the service state
that a list of all participating lawyers will be mailed free of charge to
members of the public upon request and indicate that the service is not
operated or endorsed by any public agency or any disinterested organization. ( But see Rule 7.2(d)(2).)
RPC 161. A television commercial for legal services which fails to mention that bankruptcy is the debt
relief described in the commercial and describes results obtained for others is
misleading.
RPC 239. A lawyer may display truthful
information about the lawyer's legal services on a World Wide Web site accessed
via the Internet.
RPC 241. A lawyer may participate in a directory
of lawyers on the Internet if the information about the lawyer in the directory
is truthful.
2004 FEO 1
- Opinion rules that a lawyer may participate in an on-line service that
is similar to both a lawyer referral service and a legal directory provided
there is no fee sharing with the service and all communications about the
lawyer and the service are truthful.
2004
Formal Ethics Opinion 2. Opinion rules that an attorney may not offer
promotional merchandise in a targeted direct mail solicitation letter as an
inducement to call the attorneyÕs office.
2005
Formal Ethics Opinion 10. Opinion addresses ethical concerns raised by an
internet-based or virtual law practice and the provision of unbundled legal
services.
2010
Formal Ethics Opinion 4. A barter exchange that provides a complete, impartial list
of all participating lawyers, does not purport to recommend or select a lawyer
for an exchange member seeking legal services, and does not restrict the number
of participating lawyers is not a lawyer referral service.
2011
Formal Ethics Opinion 10. A lawyer may advertise on a website that offers daily
discounts to consumers where the website companyÕs compensation is a percentage
of the amount paid to the lawyer if certain disclosures are made and certain
conditions are satisfied.
CASE NOTES
First Amendment challenge to N.C. State Bar ethics opinion 2000 FEO 6 ruling
that a television advertisement called "Strategy Session" violated
Rule 7.1. The court rejected the First Amendment challenge and found the
advertisement to be inherently misleading. The court reasoned that the
advertisement's portrayal of the insurance industry constituted a material
misrepresentation of fact and omitted facts necessary to make the
advertisement, when considered as a whole, not materially misleading. The ad
also created an unjustified expectation that the lawyers advertised could
obtain settlements without regard to the facts underlying a claim based solely
on their reputation and insurance companies' fear or reluctance to litigate
against them. Farrin et al. v. Thigpen et al., 173 F. Supp. 2d 427 (M.D.N.C. 2001).
Information About Legal Services
Rule 7.3
Direct Contact with
Potential Clients
(a) A lawyer shall not by in-person, live telephone or real-time
electronic contact solicit professional employment from a potential client when
a significant motive for the lawyer's doing so is the lawyer's pecuniary gain,
unless the person contacted:
(1) is
a lawyer; or
(2) has a family, close personal, or prior professional relationship with the
lawyer.
(b) A lawyer shall not solicit professional employment from a
potential client by written, recorded or electronic communication or by
in-person, telephone or real-time electronic contact even when not otherwise
prohibited by paragraph (a), if:
(1) the
potential client has made known to the lawyer a desire not to be solicited by
the lawyer; or
(2) the solicitation involves coercion, duress, harassment, compulsion,
intimidation, or threats.
(c) Targeted Communications. Unless the recipient of the
communication is a person specified in paragraphs (a)(1) or (a)(2), every
written, recorded, or electronic communication from a lawyer soliciting
professional employment from a potential client known to be in need of legal
services in a particular matter shall include the statement, in capital
letters, "THIS IS AN ADVERTISEMENT FOR LEGAL SERVICES" (the
advertising notice) subject to the following requirements:
(1) Written
Communications. Written communications shall be mailed in an envelope. The
advertising notice shall be printed on the front of the envelope, in a font
that is as large as any other printing on the envelope. The front of the
envelope shall contain no printing other than the name of the lawyer or law
firm and return address, the name and address of the recipient, and the
advertising notice. The advertising notice shall also be printed at the
beginning of the body of the letter in a font as large as or larger than any
other printing contained in the letter.
(2) Electronic
Communications. The advertising notice shall appear in the "in
reference" block of the address section of the communication. No other
statement shall appear in this block. The advertising notice shall also appear, at
the beginning and ending of the electronic communication, in a font as large as
or larger than any other printing
in the body of the communication or in any masthead on the communication.
(3) Recorded Communications.
The advertising notice shall be clearly articulated at the beginning and ending
of the recorded communication.
(d) Notwithstanding the prohibitions in paragraph (a), a lawyer
may participate with a prepaid or group legal service plan subject to the
following:
(1) Definition. A prepaid
legal services plan or a group legal services plan ("a plan") is any
arrangement by which a person, firm, or corporation, not otherwise authorized
to engage in the practice of law, in exchange for any valuable consideration,
offers to provide or arranges the provision of legal services that are paid for
in advance of
any immediate need for the specified legal service ("covered
services"). In addition to covered services, a plan may provide specified
legal services at fees that are less than what a non-member of the plan would
normally pay. The North Carolina
legal services offered by a plan must be provided by a licensed lawyer who is
not an employee, director or owner of the plan. A prepaid legal services plan
does not include the sale of an identified, limited legal service, such as
drafting a will, for a fixed, one-time fee.
(2) Conditions for Participation.
(A) The plan must be operated
by an organization that is not owned or directed by the lawyer;
(B) The plan must be registered with the North Carolina State Bar and comply
with all applicable rules regarding such plans;
(C)The lawyer must notify the State Bar in writing
before participating in a plan and must notify the State Bar no later than 30
days after the lawyer discontinues participation in the plan;
(D) After reasonable investigation, the lawyer must have a good faith belief
that the plan is being operated in compliance with the Revised Rules of
Professional Conduct and other pertinent rules of the State Bar;
(E) All advertisements by the plan representing that it is registered with the
State Bar shall also explain that registration does not constitute approval by
the State Bar; and
(F) Notwithstanding the prohibitions in paragraph (a), the plan may use
in-person or telephone contact to solicit memberships or subscriptions
provided:
(i)
The solicited person is not known to need legal services in a particular matter
covered by the plan; and
(ii) The contact does not involve coercion, duress, or harassment and the
communication with the solicited person is not false, deceptive or misleading.
(e) For purposes of this rule, a potential client is a person with
whom a lawyer would like to form a client-lawyer relationship.
Comment
[1] There is a potential for abuse inherent in direct in-person, live telephone
or real-time electronic contact by a lawyer with a prospective client known to
need legal services. These forms of contact between a lawyer and a prospective
client subject the layperson to the private importuning of the trained advocate
in a direct interpersonal encounter. The prospective client, who may already
feel overwhelmed by the circumstances giving rise to the need for legal
services, may find it difficult fully to evaluate all available alternatives
with reasoned judgment and appropriate self-interest in the face of the
lawyer's presence and insistence upon being retained immediately. The situation
is fraught with the possibility of undue influence, intimidation, and
over-reaching.
[2] This potential for abuse inherent in direct in-person, live telephone or
real-time electronic solicitation of potential clients justifies its
prohibition, particularly since lawyer advertising and written and recorded
communication permitted under Rule 7.2 offer alternative means of conveying
necessary information to those who may be in need of legal services.
Advertising and written and recorded communications which may be mailed or
autodialed make it possible for a potential client to be informed about the
need for legal services, and about the qualifications of available lawyers and
law firms, without subjecting the potential client to direct in-person,
telephone or real-time electronic persuasion that may overwhelm the client's
judgment.
[3] The use of general advertising and written, recorded or electronic
communications to transmit information from lawyer to potential client, rather
than direct in-person, live telephone or real-time electronic contact, will
help to assure that the information flows cleanly as well as freely. The
contents of advertisements and communications permitted under Rule 7.2 can be
permanently recorded so that they cannot be disputed and may be shared with
others who know the lawyer. This potential for informal review is itself likely
to help guard against statements and claims that might constitute false and
misleading communications, in violation of Rule 7.1. The contents of direct
in-person, live telephone or real-time electronic conversations between a
lawyer and a potential client can be disputed and may not be subject to
third-party scrutiny. Consequently, they are much more likely to approach (and
occasionally cross) the dividing line between accurate representations and
those that are false and misleading.
[4] There is far less likelihood that a lawyer would engage in abusive
practices against an individual who is a former client, or with whom the lawyer
has a close personal or family relationship, or in situations in which the
lawyer is motivated by considerations other than the lawyer's pecuniary gain.
Nor is there a serious potential for abuse when the person contacted is a
lawyer. Consequently, the general prohibition in Rule 7.3(a) and the
requirements of Rule 7.3(c) are not applicable in those situations. Also,
paragraph (a) is not intended to prohibit a lawyer from participating in
constitutionally protected activities of public or charitable legal-service
organizations or bona fide political, social, civic, fraternal, employee or
trade organizations whose purposes include providing or recommending legal services
to its members or beneficiaries.
[5] But even permitted forms of solicitation can be abused. Thus, any
solicitation which contains information which is false or misleading within the
meaning of Rule 7.1, which involves coercion, duress, harassment, compulsion,
intimidation, or threats within the meaning of Rule 7.3(b)(2), or which
involves contact with a potential client who has made known to the lawyer a
desire not to be solicited by the lawyer within the meaning of Rule 7.3(b)(1)
is prohibited. Moreover, if after sending a letter or other communication to a
client as permitted by Rule 7.2 the lawyer receives no response, any further
effort to communicate with the potential client may violate the provisions of
Rule 7.3(b).
[6] This Rule is not intended to prohibit a lawyer from contacting
representatives of organizations or groups that may be interested in
establishing a group or prepaid legal plan for their members, insureds, beneficiaries or other third parties for the
purpose of informing such entities of the availability of and details
concerning the plan or arrangement which the lawyer or lawyer's firm is willing
to offer. This form of communication is not directed to a potential client.
Rather, it is usually addressed to an individual acting in a fiduciary capacity
seeking a supplier of legal services for others who may, if they choose, become
potential clients of the lawyer. Under these circumstances, the activity which
the lawyer undertakes in communicating with such representatives and the type
of information transmitted to the individual are functionally similar to and
serve the same purpose as advertising permitted under Rule 7.2.
[7] Paragraph (c) of this rule requires that all targeted mail solicitations of
potential clients must be mailed in an envelope on which the statement,
"This is an advertisement for legal services," appears in capital
letters. The statement must appear on the front of the envelope with no other
distracting extraneous written statements other than the name and address of
the recipient and the name and return address of the lawyer or
firm. Postcards may not be used for targeted mail solicitations. No
embarrassing personal information about the recipient may appear on the back of
the envelope. The advertising notice must also appear at the beginning of an
enclosed letter or electronic communication in a font that is at least as large
as the font used for any other printing in the letter or electronic
communication. The font size requirement does not apply to a brochure enclosed
with the letter if the letter contains the required notice. As explained in
2007 Formal Ethics Opinion 15, the font size requirement does not apply to an
insignia or border used in connection with a law firmÕs name if the insignia or
border is used consistently by the firm in official communications on behalf of
the firm. The advertising notice
must also appear in the "in reference to" section of an email
communication. The requirement that certain communications be
marked, "This is an advertisement for legal services," does not apply
to communications sent in response to requests of potential clients or their
spokespersons or sponsors. General announcements by lawyers, including changes
in personnel or office location, do not constitute communications soliciting
professional employment from a client known to be in need of legal services
within the meaning of this Rule.
[8] Paragraph (d) of this Rule permits a lawyer to participate with an
organization which uses personal contact to solicit members for its group or
prepaid legal service plan, provided that the personal contact is not
undertaken by any lawyer who would be a provider of legal services through the
plan. The organization must not be owned by or directed (whether as manager or
otherwise) by any lawyer or law firm that participates in the plan. For
example, paragraph (d) would not permit a lawyer to create an organization
controlled directly or indirectly by the lawyer and use the organization for
the in-person or telephone solicitation of legal employment of the lawyer
through memberships in the plan or otherwise. The communication permitted by
these organizations also must not be directed to a person known to need legal
services in a particular matter, but is to be designed to inform potential plan
members generally of another means of affordable legal services. Lawyers who
participate in a legal service plan must reasonably assure that the plan
sponsors are in compliance with Rule 7.3(d) as well as Rules 7.1, 7.2 and
7.3(b).See
8.4(a).
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997
Amended March 1, 2003; October 6, 2004; November 16, 2006;
August 23, 2007; August 25, 2011
ETHICS OPINION NOTES
CPR 52. It is proper to notify former clients of changes in the law that
could affect their wills.
CPR 104. Attorneys may request
lenders and title insurance companies to place them on approved lists.
CPR 191. It is improper for an attorney to belong to a "Tip Club" in
which members agree to refer business to each other.
CPR 258. In response to a request, an attorney may submit a bid for legal work
to the FHA.
CPR 352. It is not improper for an attorney to inform a client with a personal
injury claim that the spouse may also have a claim and that the attorney is
willing to handle the claim.
RPC 20. An attorney may not use an
intermediary to arrange meetings between prospective business clients and the
attorney for the purpose of soliciting legal business, nor may an attorney make
"cold calls" upon prospective business clients.
RPC 57. A lawyer may agree to be on
a list of attorneys approved to handle all of a lender's title work.
RPC 71. An attorney may not accept
legal employment by a prepaid legal service plan owned by the attorney's wife
or another member of the attorney's immediate family, if the plan will market
its services by in-person solicitation.
RPC 98. The opinion construes the
term "professional relationship" and explores the circumstances under
which solicitation of persons or organizations with whom
a lawyer has had business and professional dealings is permissible. Targeted
print advertising is also discussed.
RPC 115. A lawyer may sponsor
truthful legal information which is provided by
telephone to members of the public.
RPC 146. A law firm may invite
existing clients to a social function hosted by the law firm prior to a bid
letting for contracts and may host a social function for nonclients
who attend the bid letting as long as the law firm does not solicit employment
from the nonclients.
RPC 161. The recorded message which
is heard when a television viewer dials a telephone number broadcast during a
television advertisement for legal services must include the statement
"this is an advertisement for legal services" at the beginning and
ending of the recorded message.
RPC 200. The lawyers remaining with
a firm may contact by phone or in person clients whose legal matters were
handled exclusively by a lawyer who has left the firm.
RPC 242. A lawyer may send a letter describing his services to the incorporators of a new business
provided the words "This is an advertisement for legal services" are
included in the communication.
97
Formal Ethics Opinion 6. The omission of the lawyer's
address from a targeted direct mail letter is a material misrepresentation.
2000
Formal Ethics Opinion 3. Opinion rules that a lawyer
may respond to an inquiry posted on a web page message board provided there are
certain disclosures.
2004 FEO 2 - Opinion
rules that an attorney may not offer promotional merchandise in a targeted
direct mail solicitation letter as an inducement to call the attorneyÕs office.
2011
Formal Ethics Opinion 8. Utilizing Live Chat Support
Service on Law Firm Website
Guidelines for the use of live chat support services on law firm
websites.
CASE NOTES
U.S. Const., Amend. I prohibits states
from categorically prohibiting attorneys from soliciting legal business for
pecuniary gain by sending truthful letters to potential clients known to face
particular legal problems. Shapero
v. Kentucky Bar Ass'n , 486 U.S. 466, 108 S. Ct. 1916,
100 L. Ed. 2d 475 (1988).
Information About Legal Services
Rule 7.4 Communication of Fields
of Practice and Specialization
(a) A lawyer may communicate the fact that the lawyer does or does
not practice in particular fields of law.
(b) A lawyer shall not state or imply that the lawyer is certified as a
specialist in a field of practice unless:
(1) the
certification was granted by the North Carolina State Bar;
(2) the certification was granted by an organization that is accredited by the
North Carolina State Bar; or
(3) the certification was granted by an organization that is accredited by the
American Bar Association under procedures and criteria endorsed by the North
Carolina State Bar; and
(4) the name of the certifying organization is clearly identified in the
communication.
Comment
[1] The use of the word "specialize" in any of its variant forms
connotes to the public a particular expertise often subject to recognition by
the state. Indeed, the North Carolina State Bar has instituted programs
providing for official certification of specialists in certain areas of
practice. Certification signifies that an objective entity has recognized an
advanced degree of knowledge and experience in the specialty area greater than
is suggested by general licensure to practice law. Certifying organizations are
expected to apply standards of experience, knowledge and proficiency to insure
that a lawyer's recognition as a specialist is meaningful and reliable. To
avoid misrepresentation and deception, a lawyer may not communicate that the
lawyer has been recognized or certified as a specialist in a particular field
of law, except as provided by this rule. The rule requires that a
representation of specialty may be made only if the certifying organization is
the North Carolina State Bar, an organization accredited by the North Carolina
State Bar, or an organization accredited by the American Bar Association under
procedures approved by the North Carolina State Bar. To insure that consumers
can obtain access to useful information about an organization granting
certification, the name of the certifying organization or agency must be
included in any communication regarding the certification.
[2] A lawyer may, however, describe his or her practice without using the term
"specialize" in any manner which is truthful
and not misleading. This rule specifically permits a lawyer to indicate areas
of practice in communications about the lawyer's services. If a lawyer
practices only in certain fields, or will not accept matters except in a
specified field or fields, the lawyer is permitted to so indicate. The lawyer
may, for instance, indicate a "concentration" or an
"interest" or a "limitation."
[3] Recognition of expertise in patent matters is a matter of long-established
policy of the Patent and Trademark Office. A lawyer admitted to engage in
patent practice before the United States Patent and Trademark Office may use
the designation "Patent Attorney" or a substantially similar
designation.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
RPC 43.
An attorney who is certified as a specialist by the Board of Legal
Specialization may so indicate in an advertisement in any way that is not
false, deceptive or misleading.
CASE NOTES
U.S. Const., Amend. I prohibits states
from categorically prohibiting lawyers from advertising their certification as
specialists by bona fide private organizations. Lesser restrictions are
available to eliminate any potential confusion caused by such
advertisements. Peel v. Attorney Registration &
Disciplinary Comm'n,
496 U.S. 91, 110 S. Ct. 2281, 110 L. Ed. 2d 83 (1990).
Information About Legal Services
Rule 7.5
Firm Names and Letterheads
(a) A lawyer shall not use a firm name, letterhead, or other
professional designation that violates Rule 7.1. A trade name
may be used by a lawyer in private practice if it does not imply a
connection with a government agency or with a public or charitable legal
services organization and is not false or misleading in violation of Rule 7.1.
Every trade name used by a law firm shall be registered with the North Carolina
State Bar for a determination of whether the name is misleading.
(b) A law firm with offices in more than one jurisdiction may use the same name
or other professional designation in each jurisdiction, but identification of
the lawyers in an office of the firm shall indicate the jurisdictional
limitations on those not licensed to practice in the jurisdiction where the
office is located.
(c) A law firm maintaining offices only in North Carolina may not
list any person not licensed to practice law in North Carolina as a lawyer
affiliated with the firm unless the listing properly identifies the
jurisdiction in which the lawyer is licensed and states that the lawyer is not
licensed in North Carolina.
(d) The name of a lawyer holding a public office shall not be used in the name
of a law firm, or in communications on its behalf, during any substantial
period in which the lawyer is not actively and regularly practicing with the
firm, whether or not the lawyer is precluded from practicing law.
(e) Lawyers may state or imply that they practice in a partnership or other
professional organization only when that is the fact.
Comment
[1] A firm may be designated by the names of all or some of its members, by the
names of deceased or retired members where there has been a continuing
succession in the firm's identity, or by a trade name such as the "ABC
Legal Clinic." A lawyer or law firm may also be designated by a
distinctive website address or comparable professional designation. Use of
trade names in law practice is acceptable so long as they are not misleading
and are otherwise in conformance with the rules and regulations of the State
Bar. If a private firm uses a trade name that includes a geographical name such
as "Springfield Legal Clinic," an express disclaimer that it is not a
public legal aid agency may be required to avoid a misleading implication. A
firm name that includes the surname of a deceased or retired partner is,
strictly speaking, a trade name. However, the use of such names, as well as
designations such as "Law Offices of John Doe," "Smith and
Associates," and "Jones Law Firm" are useful means of
identification and are permissible without registration with the State Bar.
However, it is misleading to use the surname of a lawyer not associated with
the firm or a predecessor of the firm. It is also misleading to use a
designation such as "Smith and Associates" for a solo practice. The
name of a retired partner may be used in the name of a law firm only if the
partner has ceased the practice of law.
[2] This rule does not prohibit the employment by a law firm of a lawyer who is
licensed to practice in another jurisdiction, but not in North Carolina,
provided the lawyer's practice is limited to areas that do not require
a North Carolina law license such as immigration law, federal tort
claims, military law, and the like. The lawyer's name may be included in the
firm letterhead, provided all communications by such lawyer on behalf of the
firm indicate the jurisdiction in which the lawyer is licensed as well as the
fact that the lawyer is not licensed in North Carolina. If law offices are
maintained in another jurisdiction, the law firm is an interstate law firm and
must register with the North Carolina State Bar as required by 27 N.C.A.C. 1E,
Section .0200.
[3] Nothing in these rules shall be construed to confer the right to
practice North Carolina law upon any lawyer not licensed to practice
law in North Carolina. See , however ,
Rule 5.5.
[4] With regard to paragraph (e), lawyers sharing office facilities, but who
are not in fact associated with each other in a law firm, may not denominate
themselves as, for example, "Smith and Jones," for that title
suggests that they are practicing law together in a firm.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 22. Where father and son practice as Doe and Doe, son may, upon
father's election to a judgeship, identify himself on his letterhead as Richard
Doe, attorney at law-successor to Doe & Doe.
CPR 69. A lawyer may be a partner in more than one law firm.
CPR 111. A law firm which has a member taking temporary leave to work for the
State may continue using the absent member's name in the firm name and on its
letterhead.
CPR 197. It is permissible to cross out a partner's name when he becomes a
judge without replacing the stationery on hand.
CPR 211. An attorney licensed in both North Carolina and South
Carolina who has an office only in South Carolina and a partner
licensed only in South Carolina may practice in North Carolina.
His firm should use the same name in North Carolina as it uses
in South Carolina and its letterhead should show the jurisdictional
limitations of its lawyers.
CPR 213. A law firm may share offices with a common reception area with an
accounting firm as long as separate telephones are maintained.
CPR 234. A law firm may operate a legal clinic.
CPR 238. An agreement between a North Carolina lawyer and a lawyer
licensed in another state to list each other on their letterhead and to refer
cases to each other is improper in the absence of a bona fide
partnership.
CPR 248. The use of A and B as a firm name is improper when Attorney A employs
Attorney B as an associate.
CPR 256. North Carolina firm may not use the
name of an out-of-state firm from which it receives referrals where there is no
bona fide interstate partnership.
CPR 265. Attorneys who share offices but are not partners may not answer phone
as A, B, and C attorneys, but may answer "law
offices." If there is a true partnership, partners must use stationery
with the firm letterhead.
CPR 274. It is possible for attorneys to share offices and still represent
conflicting interests if they maintain separate telephones and have different
secretaries.
CPR 307. An attorney who is also a real estate broker may so indicate on his
letterhead. He may operate both businesses from same office.
CPR 330. Letterhead of attorneys in realty business may also show the
designation, "attorney at law."
RPC 5. An attorney holding a Juris Doctor degree may not on that basis hold himself out
as "Doctor."
RPC 25. It is improper to list an
unlicensed attorney on letterhead as "of counsel" or "consulting
attorney."
RPC 31. A law firm may not list on
its letterhead a "corresponding" attorney in another location.
RPC 34. An attorney licensed in
North Carolina and another state who is semi-retired from a law firm in the
other state can be "of counsel" to the North Carolina firm so long as
he has a close, though not necessarily daily, association with North Carolina
firm.
RPC 85. An "of counsel"
relationship may exist between lawyers practicing in different towns if the
professional relationship is close, regular and personal and the designation is
not otherwise false or misleading.
RPC 126. Nonlawyers
may be listed as such on the letterhead of lawyers.
2005
Formal Ethics Opinion 8. Opinion rules that the
URL for a law firm website is a trade name that must register with the North
Carolina State Bar and meet the requirements of Rule 7.5(a).
2005
Formal Ethics Opinion 14. Opinion rules that the
URL for a law firm website does not have to include words that identify the
site as belonging to a law firm provided the URL is not otherwise misleading.
2010
Formal Ethics Opinion 11. A lawyer may list membership
in an organization with a self-laudatory name on his letterhead if a disclaimer
of similar results and information about the criteria for membership also
appears on the letterhead.
Information About Legal Services
Rule 7.6 Reserved
Maintaining the Integrity of the Profession
Rule 8.1 Bar
Admission and Disciplinary Matters
An applicant for admission to
the bar, or a lawyer in connection with a bar admission application or in
connection with a disciplinary matter, shall not:
(a) knowingly make a false statement of material
fact; or
(b) fail to disclose a fact necessary to correct
a misapprehension known by the person to have arisen in the matter, or
knowingly fail to respond to a lawful demand for information from an admissions
or disciplinary authority, except that this rule does not require disclosure of
information otherwise protected by Rule 1.6.
Comment
[1] The duty imposed by
this Rule extends to persons seeking admission to the bar as well as to
lawyers. Hence, if a person makes a material false statement in connection with
an application for admission, it may be the basis for subsequent disciplinary
action if the person is admitted, and in any event may be relevant in a
subsequent admission application. The duty imposed by this Rule applies to a
lawyer's own admission or discipline as well as that of others. Thus, it is a
separate professional offense for a lawyer to knowingly make a
misrepresentation or omission in connection with a disciplinary investigation
of the lawyer's own conduct. Paragraph (b) of this Rule also requires
correction of any prior misstatement in the matter that the applicant or lawyer
may have made and affirmative clarification of any misunderstanding on the part
of the admissions or disciplinary authority of which the person involved
becomes aware. It should also be noted that N.C.G.S. ¤84-28(b)(3) defines
failure to answer a formal inquiry of the North Carolina State Bar as
misconduct for which discipline is appropriate.
[2] This Rule is subject to the provisions of
the fifth amendment of the United States Constitution and corresponding
provisions of the North Carolina Constitution. A person relying on such a
provision in response to a question, however, should do so openly and not use
the right of nondisclosure as a justification for failure to comply with this
Rule.
[3] A lawyer representing an applicant for
admission to the bar, or representing a lawyer who is the subject of a
disciplinary inquiry or proceeding, is governed by the rules applicable to the
client-lawyer relationship, including Rule 1.6 and, in some cases, Rule 3.3.
History Note: Statutory Authority G.
84-23
Adopted July 24, 1997; Amended March 1, 2003.
Maintaining the Integrity of the Profession
Rule 8.2
Judicial and Legal Officials
(a)
A lawyer
shall not make a statement that the lawyer knows to be false or with reckless
disregard as to its truth or falsity concerning the qualifications or integrity
of a judge, or other adjudicatory officer or of a candidate for election or
appointment to judicial office.
(b) A lawyer who is a candidate for judicial
office shall comply with the applicable provisions of the Code of Judicial
Conduct.
Comment
[1] Assessments by lawyers are relied on in
evaluating the professional or personal fitness of persons being considered for
election or appointment to judicial office. Expressing honest and candid
opinions on such matters contributes to improving the administration of
justice. Conversely, false statements by a lawyer can unfairly undermine public
confidence in the administration of justice.
[2] When a lawyer seeks judicial office, the
lawyer should be bound by applicable limitations on political activity.
[3] To maintain the fair and independent
administration of justice, lawyers are encouraged to continue traditional
efforts to defend judges and courts unjustly criticized. Adjudicatory
officials, not being wholly free to defend themselves, are entitled to receive
the support of the bar against such unjust criticism.
[4] While a lawyer as a citizen has a right to
criticize such officials publicly, the lawyer should be certain of the merit of
the complaint, use appropriate language, and avoid petty criticisms, for
unrestrained and intemperate statements tend to lessen public confidence in our
legal system. Criticisms motivated by reasons other than a desire to improve
the legal system are not justified.
History Note: Statutory Authority G.
84-23
Adopted July 24, 1997; Amended March 1, 2003.
Maintaining the Integrity of the Profession
Rule 8.3
Reporting Professional Misconduct
(a) A lawyer who knows that
another lawyer has committed a violation of the Rules of Professional Conduct
that raises a substantial question as to that lawyer's honesty, trustworthiness
or fitness as a lawyer in other respects, shall inform the North Carolina State
Bar or the court having jurisdiction over the matter.
(b) A lawyer who knows that a judge has committed a violation of applicable
rules of judicial conduct that raises a substantial question as to the judge's
fitness for office shall inform the North Carolina Judicial Standards
Commission or other appropriate authority.
(c) This Rule does not require disclosure of information otherwise protected by
Rule 1.6.
(d) A lawyer who is disciplined in any state or federal court for a violation
of the Rules of Professional Conduct in effect in such state or federal court
shall inform the secretary of the North Carolina State Bar of such action in
writing no later than 30 days after entry of the order of discipline.
(e) A lawyer who is serving as a mediator and who is subject to
the North Carolina Supreme Court Standards of Professional Conduct for
Mediators (the Standards) is not required to disclose information learned
during a mediation if the Standards do not allow
disclosure. If disclosure is allowed by the Standards, the lawyer is required
to report professional misconduct consistent with the duty to report set forth
in paragraph (a).
Comment
[1] Self-regulation of the legal profession requires that members of the
profession initiate disciplinary investigation when they know of a violation of
the Rules of Professional Conduct. Lawyers have a similar obligation with
respect to judicial misconduct. An apparently isolated violation may indicate a
pattern of misconduct that only a disciplinary investigation can uncover.
Reporting a violation is especially important where the victim is unlikely to
discover the offense.
[2] Although the North Carolina State Bar is always an appropriate place to
report a violation of the Rules of Professional Conduct, the courts
of North Carolina have concurrent jurisdiction over the conduct of
the lawyers who appear before them. Therefore, a lawyer's duty to report may be
satisfied by reporting to the presiding judge the misconduct of any lawyer who
is representing a client before the court. The court's authority to impose
discipline on a lawyer found to have engaged in misconduct extends beyond the
usual sanctions imposed in an order entered pursuant to Rule 11 of the North
Carolina Rules of Civil Procedure.
[3] A report about misconduct is not required where it would involve violation
of Rule 1.6. However, a lawyer should encourage a client to consent to
disclosure where prosecution would not substantially prejudice the client's
interests.
[4] If a lawyer were obliged to report every violation of the Rules, the
failure to report any violation would itself be a professional offense. Such a
requirement existed in many jurisdictions but proved to be unenforceable. This
Rule limits the reporting obligation to those offenses that a self-regulating
profession must vigorously endeavor to prevent. A measure of judgment is,
therefore, required in complying with the provisions of this Rule. The term
"substantial" refers to the seriousness of the possible offense and
not the quantum of evidence of which the lawyer is aware. A report should be
made to the North Carolina State Bar unless some other agency or court is more
appropriate in the circumstances. Similar considerations apply to the reporting
of judicial misconduct.
[5] The duty to report professional misconduct does not apply to a lawyer
retained to represent a lawyer whose professional conduct is in question. Such
a situation is governed by the Rules applicable to the client-lawyer
relationship.
[6] Information about a lawyer's or judge's misconduct or
fitness may be received by a lawyer in the course of that lawyer's
participation in an approved lawyers' or judges' assistance program. In
that circumstance, providing for an exception to the reporting requirements of
paragraphs (a) and (b) of this Rule encourages lawyers and judges to seek
treatment through such a program. Conversely, without such an exception,
lawyers and judges may hesitate to seek assistance from these programs, which
may then result in additional harm to their professional careers and additional
injury to the welfare of clients and the public. For this reason, Rule 1.6 (c)
includes in the definition of confidential information any information regarding
a lawyer or judge seeking assistance that is received by a lawyer acting as an
agent of a lawyers' or judges' assistance program approved by the North
Carolina State Bar or the North Carolina Supreme Court. Because such information is protected from disclosure by Rule 1.6, a
lawyer is exempt from the reporting requirements of paragraphs (a) and (b) with
respect to such information. On the other hand, a lawyer who receives such
information would nevertheless be required to comply with the Rule 8.3
reporting provisions to report misconduct if the impaired lawyer or judge
indicates an intent to engage in illegal activity; for example, conversion of
client funds to his or her use.
[7] The North Carolina Supreme Court has adopted
Standards of Professional Conduct for Mediators (the Standards) to regulate the
conduct of certified mediators and mediators in court-ordered mediations.
Mediators governed by the Standards are required to keep confidential the
statements and conduct of the parties and other participants in the mediation,
with limited exceptions, to encourage the candor that is critical to the
successful resolution of legal disputes. Paragraph (e) recognizes the
concurrent regulatory function of the Standards and protects the
confidentiality of the mediation process. Nevertheless, if the Standards allow
disclosure, a lawyer serving as a mediator who learns of or observes conduct by
a lawyer that is a violation of the Rules of Professional Conduct is required
to report consistent with the duty set forth in paragraph (a) of this Rule. In
the event a lawyer serving as a mediator is confronted with
professional misconduct by a lawyer participating in a mediation that may not
be disclosed pursuant to the Standards, the lawyer/mediator
should consider withdrawing from the mediation or taking such other action as
may be required by the Standards. See, e.g., N.C. Dispute Resolution Commission
Advisory Opinion 10-16 (February 26, 2010).
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003; October 7, 2010
ETHICS OPINION NOTES
CPR 342. An attorney is not obligated to report violations of the law committed
by nonlawyers.
RPC 17. An attorney who acquires
knowledge of apparent misconduct must report the matter to the State Bar.
RPC 84. An attorney may not
condition settlement of a civil dispute on an agreement not to report lawyer
misconduct.
RPC 127. An attorney must report
information to the State Bar concerning another attorney's disbursement of
conditionally delivered settlement proceeds without satisfying all conditions
precedent if the disbursement was made in knowing disregard of such conditions
and if such information is not confidential.
RPC 243. Opinion analyzes whether
conduct "raises a substantial question" as to a lawyer's honesty,
trustworthiness, or fitness so as to require reporting to the State Bar.
2001
Formal Ethics Opinion 5. Opinion rules that disclosures
made during a LAP support group meeting are confidential and not reportable to
the State Bar under Rule 8.3.
CASE NOTES
Knowledge of a Clear Violation. - An allegation that an attorney and a
district court judge knew that the plaintiff's attorney failed to perfect an
appeal did not support an inference that defendants had "knowledge of a
clear violation of DR1-102" which should have been reported to the State
Bar, since there are many legitimate reasons why an appeal may not be perfected.Williams v.
Council of North Carolina State Bar,
46 N.C. App. 824, 266 S.E.2d 391, cert. denied , 301 N.C. 106
(1980).
Maintaining the Integrity of the Profession
Rule 8.4 Misconduct
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Rules of Professional Conduct, knowingly
assist or induce another to do so, or do so through the acts of another;
(b) commit a criminal act that reflects adversely on the lawyer's honesty,
trustworthiness or fitness as a lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice;
(e) state or imply an ability to influence improperly a government agency or
official;
(f) knowingly assist a judge or judicial officer in conduct that is a violation
of applicable rules of judicial conduct or other law; or
(g) intentionally prejudice or damage his or her client during the course of
the professional relationship, except as may be required by Rule 3.3.
Comment
[1] Lawyers are subject to discipline when they violate or attempt to violate
the Rules of Professional Conduct, knowingly assist or induce another to do so
or do so through the acts of another, as when they request or instruct an agent
to do so on the lawyer's behalf. Paragraph (a), however, does not prohibit a
lawyer from advising a client or, in the case of a government lawyer,
investigatory personnel, of action the client, or such investigatory personnel,
is lawfully entitled to take.
[2] Many kinds of illegal conduct reflect adversely on a lawyer's fitness to
practice law, such as offenses involving fraud and the offense of willful
failure to file an income tax return. However, some kinds of offenses carry no
such implication. Although a lawyer is personally answerable to the entire
criminal law, a lawyer should be professionally answerable only for offenses
that indicate lack of those characteristics relevant to law practice. Offenses
involving violence, dishonesty, breach of trust, or serious interference with
the administration of justice are in that category. A pattern of repeated
offenses, even ones of minor significance when considered separately, can
indicate indifference to legal obligation. A lawyer's dishonesty, fraud,
deceit, or misrepresentation is not mitigated by virtue of the fact that the
victim may be the lawyer's partner or law firm. A lawyer who steals funds, for
instance, is guilty of the most serious disciplinary violation regardless of
whether the victim is the lawyer's employer, partner, law firm, client, or a
third party.
[3] The purpose of professional discipline for misconduct is not punishment,
but to protect the public, the courts, and the legal profession. Lawyer
discipline affects only the lawyer's license to practice law. It does not
result in incarceration. For this reason, to establish a violation of paragraph
(b), the burden of proof is the same as for any other violation of the Rules of
Professional Conduct: it must be shown by clear, cogent, and convincing
evidence that the lawyer committed a criminal act that reflects adversely on
the lawyer's honesty, trustworthiness, or fitness as a lawyer. Conviction of a
crime is conclusive evidence that the lawyer committed a criminal act although,
to establish a violation of paragraph (b), it must be shown that the criminal
act reflects adversely on the lawyer's honesty, trustworthiness, or fitness as
a lawyer. If it is established by clear, cogent, and convincing evidence that a
lawyer committed a criminal act that reflects adversely on the lawyer's
honesty, trustworthiness, or fitness as a lawyer, the lawyer may be disciplined
for a violation of paragraph (b) although the lawyer is never prosecuted or is
acquitted or pardoned for the underlying criminal act.
[4] A showing of actual prejudice to the administration of justice is not
required to establish a violation of paragraph (d). Rather, it must only be
shown that the act had a reasonable likelihood of prejudicing the
administration of justice. For example, in State Bar v. DuMont,
52 N.C. App. 1, 277 S.E.2d 827 (1981), modified on other grounds, 304 N.C. 627,
286 S.E.2d 89 (1982), the defendant was disciplined for advising a witness to
give false testimony in a deposition even though the witness corrected his
statement prior to trial. The phrase "conduct prejudicial to the
administration of justice" in paragraph (d) should be read broadly to
proscribe a wide variety of conduct, including conduct that occurs outside the
scope of judicial proceedings. In State Bar v. Jerry Wilson, 82 DHC 1, for
example, a lawyer was disciplined for conduct prejudicial to the administration
of justice after forging another individual's name to a guarantee agreement,
inducing his wife to notarize the forged agreement, and using the agreement to
obtain funds.
[5] A lawyer may refuse to comply with an obligation imposed by law upon a good
faith belief that no valid obligation exists. The provisions of Rule 1.2(d)
concerning a good faith challenge to the validity, scope, meaning or
application of the law apply to challenges of legal regulation of the practice
of law.
[6] Lawyers holding public office assume legal responsibilities going beyond
those of other citizens. A lawyer's abuse of public office can suggest an
inability to fulfill the professional role of lawyers. The same is true of
abuse of positions of private trust such as trustee, executor, administrator,
guardian, agent and officer, director or manager of a corporation or other organization.
History Note: Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.
ETHICS OPINION NOTES
CPR 110. An attorney may not advise a client to seek Dominican divorce
knowing that the client will return immediately to North Carolina and
continue residence.
CPR 168. An attorney may file personal bankruptcy.
CPR 188. An attorney may not draw deeds or other legal instruments based on
land surveys made by unregistered land surveyors.
CPR 342. An attorney should not close a loan where the transaction is
conditioned by the lender upon the placement of title insurance with a
particular company.
CPR 369. An attorney may close a loan if the lender merely suggests rather than
requires the placement of title insurance with a particular company.
RPC 127. An attorney may not
deliberately release settlement proceeds which were
conditionally delivered without satisfying all conditions precedent.
RPC 136. An attorney may notarize documents which are to be used in legal proceedings in which
the attorney appears.
RPC 143. A lawyer who represents or
has represented a member of the city council may represent another client
before the council provided the lawyer does not attempt improperly to influence
the council.
RPC 152. The prosecutor and the
defense attorney must see that all material terms of a negotiated plea are
disclosed in response to direct questions when the plea is entered in open
court.
RPC 159. An attorney may not
participate in the resolution of a civil dispute involving allegations against
a psychotherapist of sexual involvement with a patient if the settlement is
conditioned upon the agreement of the complaining party not to report the
misconduct to the appropriate licensing board.
RPC 162. A lawyer may not
communicate with the opposing party's nonparty treating physician about the physician's
treatment of the opposing party unless the opposing party consents.
RPC 171. A lawyer may tape record a
conversation with an opposing lawyer without disclosure to the opposing
lawyer.
RPC 180. A lawyer may not passively
listen while the opposing party's nonparty treating physician comments on his
or her treatment of the opposing party unless the opposing party consents to
the communication.
RPC 192. A lawyer may not listen to
an illegal tape recording made by his client nor may he use the information on
the illegal tape recording to advance his client's case.
RPC 197. A prosecutor must notify
defense counsel, jail officials, or other appropriate persons to avoid the
unnecessary detention of a criminal defendant after the charges against the
defendant have been dismissed by the prosecutor.
RPC 204. It is prejudicial to the
administration of justice for a prosecutor to offer special treatment to
individuals charged with traffic offenses or minor crimes in exchange for a
direct charitable contribution to the local school system.
RPC 221. Absent a court order or law
requiring delivery of physical evidence of a crime to the authorities, a lawyer
for a criminal defendant may take possession of evidence that is not contraband
to examine, test, or inspect the evidence. The lawyer must return inculpatory physical evidence that is not contraband to the
source and advise the source of the legal consequences pertaining to the
possession or destruction of the evidence.
RPC 236. A lawyer may not issue a
subpoena containing misrepresentations as to the pendency of an action, the
date or location of a hearing, or a lawyer's authority to obtain documentary
evidence.
RPC 243. It is prejudicial to the
administration of justice for a prosecutor to threaten to use his discretion to
schedule a criminal trial to coerce a plea agreement from a criminal
defendant.
98
Formal Ethics Opinion 2. Opinion rules that a lawyer
may explain the effect of service of process to a client but may not advise a
client to evade service of process.
98
Formal Ethics Opinion 19. Opinion provides guidelines
for a lawyer representing a client with a civil claim that also constitutes a
crime.
99
Formal Ethics Opinion 2. Opinion rules that a defense
lawyer may suggest that the records custodian of plaintiff's medical record
deliver the medical record to the lawyer's office in lieu of an appearance at a
noticed deposition provided the plaintiff's lawyer consents.
2000
Formal Ethics Opinion 8. Opinion rules that a lawyer
acting as a notary must follow the law when acknowledging a signature on a
document.
2001
Formal Ethics Opinion 12. Opinion rules that a closing
lawyer may not counsel or assist a client to affix excess excise tax stamps on
an instrument for registration with the register of deeds.
2003
Formal Ethics Opinion 11. Opinion rules that a
departed lawyer must deal honestly with the members of her former firm when
dividing a legal fee.
2005
Formal Ethics Opinion 3. Opinion rules that a
lawyer may not threaten to report an opposing party or a witness to immigration
officials to gain an advantage in civil settlement negotiations.
2010
Formal Ethics Opinion 2. A lawyer may not serve
an out of state health care provider with an unenforceable North
Carolina subpoena and may not use documents produced pursuant to such a
subpoena.
2011
Formal Ethics Opinion 9 . A lawyer may not allow a
person who is not employed by or affiliated with the lawyerÕs firm to use firm
letterhead.
2011
Formal Ethics Opinion 12. A lawyer must notify the
court when a clerk of court mistakenly dismisses a clientÕs charges.
CASE NOTES
Concealment of Material Facts. - Intentionally encouraging the
concealment of material facts relevant to the identity of the driver in a
driving under the influence prosecution is prejudicial to the administration of
justice. Such conduct raises serious doubts as to the attorney's desire to
bring about a just result in such a prosecution and adversely reflects on the
attorney's fitness to practice law. North Carolina State Bar v. Graves , 50
N.C. App. 450, 274 S.E.2d 396 (1981).
Misrepresentation as to Opposing Party's Whereabouts.
- An attorney clearly engaged in conduct which involved fraud, dishonesty,
deceit and misrepresentation when, in a divorce action, she failed to inform
the court of a letter which contained the opposing party's return address,
while at the same time presenting to the court an affidavit she had drafted in
which her client swore that her husband's whereabouts were unknown and could
not with due diligence be ascertained. North Carolina State Bar v. Wilson , 74
N.C. App. 777, 330 S.E.2d 280 (1985).
Conversion of Client's Check. - An attorney's act of
forging a client's endorsement on an insurance check received by the attorney
and converting the check to personal use constituted conduct involving moral
turpitude. North Carolina State Bar v. Whitted , 82 N.C.
App. 531, 347 S.E.2d 60 (1986), aff'd ,
319 N.C. 398, 354 S.E.2d 501 (1987).
Letter to Attorney Representing Former Clients. -
Findings by Disciplinary Hearing Commission did not support the Commission's
conclusion that the defendant-attorney had engaged in conduct prejudicial to
the administration of justice by writing a letter to the attorney representing
the defendant-attorney's former clients where the Commission's order did not
state whether the letter constituted a threat, the nature of the threat, if
any, and how the conduct was prejudicial to the administration of
justice. North Carolina State Bar v. Beaman , 100 N.C.
App. 677, 398 S.E.2d 68 (1990).
Misappropriation of Funds. - The attorney
misappropriated client funds in violation of Rule 1.2(b) of the (Superseded)
1985 Rules of Professional Conduct. It was no defense that the attorney intended
at all times to return the funds and in fact did so. Evidence sufficient to
support a charge of embezzlement also constitutes conduct involving dishonesty
in violation of Rule 1.2(c) of the 1985 Rules of Professional Conduct. North
Carolina State Bar v. Mulligan ,
101 N.C. App. 524, 400 S.E.2d 123 (1991).
Lending Money to Clients. - The State Bar's hearing committee's finding
adequately supported its conclusion that the defendant violated Rules 2.1 and
5.3(B) of Professional Responsibility where the undisputed facts were that: (1)
the defendant kept $ 20,000.00 in his trust account for several years which
came from his brother's company, and (2) he loaned this money to three clients
to pay for one client's surgery; another client's rent and payments on a car
note; and a third client's surgical, medical and travel expenses. North Carolina State Bar v. Harris, 137 N.C. App. 207,
527 S.E.2d 728 (2000).
Cited in North Carolina State Bar v. Nelson , 107 N.C. App. 543, 421
S.E.2d 163 (1992).
Conviction of Crime. - Conviction of a crime is not a
necessary element in a disciplinary proceeding. North Carolina State
Bar v. Rush ,
121 N.C. App. 488, 466 S.E.2d 340 (1996).
Maintaining the Integrity of the Profession
Rule 8.5
Disciplinary Authority; Choice of Law
(a) Disciplinary Authority. A lawyer admitted to practice
in North Carolina is subject to the disciplinary authority
of North Carolina, regardless of where the lawyer's conduct occurs. A
lawyer not admitted in North Carolina is also subject to the
disciplinary authority of North Carolinaif the
lawyer renders or offers to render any legal services in North Carolina. A
lawyer may be subject to the disciplinary authority of both North
Carolina and another jurisdiction for the same conduct.
(b) Choice of Law. In any exercise of the disciplinary authority of North
Carolina, the rules of professional conduct to be applied shall be as follows:
(1) for
conduct in connection with a matter pending before a tribunal, the rules of the
jurisdiction in which the tribunal sits, unless the rules of the tribunal
provide otherwise; and
(2) for any other conduct, the rules of the jurisdiction in which the lawyer's
conduct occurred, or, if the predominant effect of the conduct is in a different
jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A
lawyer is not subject to discipline if the lawyer's conduct conforms to the
rules of a jurisdiction in which the lawyer reasonably believes the predominant
effect of the lawyer's conduct will occur.
Comment
Disciplinary Authority
[1] It is longstanding law that conduct of a
lawyer admitted to practice in North Carolina is subject to the
disciplinary authority of North Carolina. Extension of the disciplinary
authority of North Carolina to other lawyers who render or offer to
render legal services in North Carolina is for the protection of the
citizens of North Carolina.
Choice of Law
[2] A lawyer may be potentially subject to more
than one set of rules of professional conduct which impose different
obligations. The lawyer may be licensed to practice in more than one
jurisdiction with differing rules, or may be admitted to practice before a
particular court with rules that differ from those of the jurisdiction or jurisdictions
in which the lawyer is licensed to practice. Additionally, the lawyer's conduct
might involve significant contacts with more than one jurisdiction.
[3] Paragraph (b) seeks to resolve such potential conflicts. Its premise is
that minimizing conflicts between rules, as well as uncertainty about which
rules are applicable, is in the best interest of both clients and the
profession (as well as the bodies having authority to regulate the profession).
Accordingly, it takes the approach of (i) providing
that any particular conduct of a lawyer shall be subject to only one set of
rules of professional conduct, (ii) making the determination of which set of
rules applies to particular conduct as straightforward as possible, consistent
with recognition of appropriate regulatory interests of relevant jurisdictions,
and (iii) providing a safe harbor for lawyers who act reasonably in the face of
uncertainty.
[4] Paragraph (b)(1) provides that as to a lawyer's conduct relating to a
proceeding pending before a tribunal, the lawyer shall be subject only to the
rules of the jurisdiction in which the tribunal sits unless the rules of the
tribunal, including its choice of law rule, provide otherwise. As to all other
conduct, including conduct in anticipation of a proceeding not yet pending
before a tribunal, paragraph (b)(2) provides that a lawyer shall be subject to
the rules of the jurisdiction in which the lawyerconduct
occurred, or, if the predominant effect of the conduct is in another
jurisdiction, the rules of that jurisdiction shall be applied to the conduct.
In the case of conduct in anticipation of a proceeding that is likely to be
before a tribunal, the predominant effect of such conduct could be where the
conduct occurred, where the tribunal sits or in another jurisdiction.
[5] When a lawyer's conduct involves significant contacts with more than one
jurisdiction, it may not be clear whether the predominant effect of the
lawyer's conduct will occur in a jurisdiction other than the one in which the
conduct occurred. So long as the lawyer's conduct conforms to the rules of a
jurisdiction in which the lawyer reasonably believes the predominant effect
will occur, the lawyer is not subject to discipline under this Rule.
[6] If North Carolina and another admitting jurisdiction were to
proceed against a lawyer for the same conduct, they should, applying this rule,
identify the same governing ethics rules. They should take all appropriate
steps to see that they do apply the same rule to the same conduct, and in all events
should avoid proceeding against a lawyer on the basis of two inconsistent
rules.
[7] The choice of law provision applies to lawyers engaged in transnational
practice, unless international law, treaties or other agreements between
competent regulatory authorities in the affected jurisdictions provide
otherwise.
History Note:
Statutory Authority G. 84-23
Adopted July 24, 1997; Amended March 1, 2003.